Govt mulls import of 2 mt rice to boost supply

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New Delhi: The government is mulling over importing up to 2 million tonne (mt) of rice to augment domestic supply, as production of the foodgrain is projected to decline under the twin impact of drought and floods.

The Centre, which had scrapped import duty on rice last month, may also consider incentivising imports, sources said.

India, the world's second-largest rice producer, is weighing options of importing rice from Thailand and Vietnam on government-to-government basis as well, they said, adding that imports are likely to be spread over the next one year.

An empowered group of ministers (eGoM) on food, headed by finance minister Pranab Mukherjee, is scheduled to meet on November 12 to take a decision on these proposals.

State-owned trading firms STC, MMTC and PEC have already floated tenders on government instructions to import a total of 30,000 tonne of rice by December for sale in the domestic market.

Earlier, finance minister Pranab Mukherjee had said rice production could decline by 16 million tonne this year in view of drought and floods. India produced 99.15 million tonne of rice in 2008-09.

Ironically, after witnessing successive years (2007-09) of bumper production, the country is importing to boost domestic availability. PSUs apart, private traders have also started importing from countries like Thailand. The government, however, does not need to import rice to augment its reserves, as it has piled up enough of the foodgrain for supply through ration shops, the sources said.

The Food Corporation of India, the nodal agency for procurement and distribution of foodgrain, had bought record 33.6 million tonne of rice in 2008-09. This year too, it plans to procure at least 26 million tonne of rice.

The proposal to import came after drought in about half of India dragged down paddy acreage by about six million hectares and subsequent floods in Andhra Pradesh, Maharashtra and Karnataka ravaged the standing crop.