India sees record rice buys, export hopes brighten

Written by Reuters | New Delhi, August 27: | Updated: Aug 27 2008, 21:46pm hrs
India will buy record quantities of rice from its farmers after a good harvest, a top government official said, raising hopes it will join the ranks of top global producers easing export curbs.

India will review its ban on non-basmati exports in November, and the possible return of what was the world's second-biggest rice exporter last year will add further pressure to prices that have slid around a third from their May record high.

Alok Sinha, chief of the Food Corp of India, told Reuters the state-run firm had already bought more than the targeted 27 million tonnes, easing concerns of some trade and government officials that procurement would fall short of the mark.

"After procuring record quantities of wheat, we are going to repeat the feat in rice by procuring 28 million tonnes, surpassing 27.5 million tonnes procured two years ago," Sinha said.

India joined other major producers earlier this year in banning exports on fears of dwindling supplies and rising prices, sending benchmark Thai prices THWHB-up three-fold to a record peak of $1,080 a tonne in March.

But Egypt has said it will end its ban next month, Pakistan, the world's fifth-largest exporter, has scrapped a minimum export price, and Vietnam lifted its ban in mid-June.

Traders say India's recent decision to allow exports of seeds of rice and corn as well and hopes of record purchases may spur the government to allow some exports.

Farm Minister Sharad Pawar has said the government would review the ban on non-basmati rice exports after October, when the new crop is harvested.

Sinha, the custodian of the country's grain stocks, said wheat at warehouses stood at 23.5 million tonnes, up from 13.5 million tonnes a year ago. Rice stocks were at 7.9 million tonnes, down 2 million tonnes on year.

Higher food stocks in India, the world's second-biggest grower of rice and wheat, ease concerns of a shortage in world markets and keep global grain prices in check, analysts say.

While rice export curbs pushed Thai prices up, a number of wheat import tenders floated by India in 2006 and 2007 led to a spurt in prices on the Chicago Board of Trade.