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Mumbai: India, the world's second-biggest rice producer, increased the minimum price for overseas shipments of the grain and restricted export outlets to boost local supplies and curb inflation.
Companies can only export non-basmati rice for a minimum of Rs26,000 a metric tonne, or $650 a tonne, not including freight costs, compared with $500 a tonne earlier, the directorate general of foreign trade said in a notification on its websiteon Friday.
Finance Minister Palaniappan Chidambaram said on March 4 the government may take more steps to curb inflation as the winter crop of wheat, rice and pulses is likely to decline this year. Winter rice output is forecast to drop to 12.6 million tonnes from 13.2 million tonnes, the government said February 28.
"The new minimum export price effectively shuts the door on exports of non-basmati rice from India," R.S. Seshadri, director of New Delhi-based Tilda Riceland Ltd., said by phone. "The port restriction is going to hurt exporters even more."
Exporters can ship rice only through ports in Kandla, Kakinada, Kolkata and Mumbai, the directorate-general of foreign trade said. India has about a dozen major ports.
The government also set a minimum export price for the first time on shipments of aromatic basmati rice grown in the foothills of the Himalayas. Only basmati rice priced at Rs36,000 a tonne, or $900 a tonne, can be exported, it said.
"Basmati rice exports will continue without any trouble as the international prices are way above the minimum price set by the government," Seshadri said.
India banned shipments of rice in October, before easing the restriction in December by setting the benchmark export price of $500 a tonne. The country shipped 3.6 million tonnes of rice overseas in the year ended March 31, little changed from the previous year.
The country usually exports rice to the Middle East, West Africa, Sri Lanka and Bangladesh.
India's inflation reached a nine-month high in the third week of February as prices of fruit, vegetables and oilseeds rose. Wholesale prices climbed 5.02 per cent in the week, from a year earlier, the Ministry of Commerce and Industry said on Friday.
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