India, the world's second-biggest rice producer, should scrap a ban on most overseas shipments of the grain to allow sales of at least three million tons this year after a record crop boosted stockpiles, exporters said.
"We have a surplus and we shouldn't allow the grain to rot because of the ban," Vijay Setia, president of the All India Rice Exporters' Association, said Thursday. After a 99 million ton harvest, there was a surplus of about six million tons, and a new government, after voting concludes in national polls next week, may permit exports, Setia said in a telephone interview.
A resumption of full exports from India may help to extend the 41 percent decline in global rough rice prices over the past year. The Chicago contract had touched a record in 2008 amid export curbs by nations including India and Vietnam, and a scramble for supplies by importers such as the Philippines.
The Indian "government can restrict exports to expensive varieties of rice to ensure the sales don't push up prices," Setia said. "It's important Indian farmers don't switch to other crops and their produce rot because of lack of policy."
July-delivery futures on the Chicago Board of Trade fell 1.2 percent to US$12.815 per 100 pounds in after-hours electronic trading at 2:36 p.m. in Mumbai. The most-active contract touched a record $25.07 per 100 pounds in April 2008.
India banned non-basmati rice exports last year to rein in prices after demand from government welfare programs doubled in five years. The government has since September eased the curbs to allow shipments of a premium-quality grain and allowed some exports to African nations, Nepal and Bangladesh.
Commerce Secretary G.K. Pillai said January 28 that the nation would retain the rice export curbs until at least this month given the elections. Pillai's "own feeling" was that any relaxation " may come after May," he said then.