India has included the premium Pusa 1121 rice in the basmati-branded varieties and may scrap an export tax on the category, the farm minister said on Tuesday, cheering exporters and farmers. The country would maintain a ban on exports of wheat but would sell the grain to some countries that have approached New Delhi diplomatically, Sharad Pawar said.
The government banned exports of non-basmati rice in April and impose an export tax of 8,000 rupees ($165) per tonne on aromatic basmati. The country banned wheat exports in 2007. Responding to pressure from exporters and farmers, the country in September allowed exports of PUSA 1121 but inclusion of the variety in the basmati category will now force traders to pay the export tax.
"We have been demanding abolition of export duty and now hope that the duty will be scrapped soon as there is no shortage of rice now," said Vijay Setia, president of the All India Rice Exporters' Association. The tax was too high to bear, said Ashok Sethi, member of the Punjab Rice Exporters Association.
Pawar said that although the government would continue with the ban on exports of non-basmati rice, it would consider traders' demand to abolish the export tax on basmati. However, Trade Minister Kamal Nath on Tuesday separately told reporters that India would consider lifting a ban on exports of non-basmati rice.
Analysts say the decision to continue with rice export curbs will support benchmark Thai prices, which have fallen below $600 a tonne for the first time in seven months. Prices soared to a record high of $1,080 in April as countries around the world clamped bans on exports to secure domestic supplies.
Despite producing record quantities of rice and wheat in the crop year to June 2008, India has continued with export curbs on the two staples to build large reserves at home as part of government steps to improve its electoral prospects. Elections are due early next year.
"There is no plan to remove the ban on wheat exports. We will take a conservative view on that. But we have requests from some countries, which we might consider," Pawar said. He said next year's wheat crop was likely to be bigger than the 78.4 million tonnes harvested in 2008 because of favourable soil conditions and climate.
VEGETABLE OILS Pawar said his government would review the import and export regime for edible oils later on Tuesday, and may make changes. "International market has come down substantially and we are keeping a close eye on it. We may take steps on edible oil exports and import duty today."
The government in April abolished a 20 percent import tax on crude edible oils and cut the levy on refined oils to 7.5 percent from 20.75 percent to combat rising prices. Benchmark January palm oil contracts on the Bursa Malaysia Derivatives Exchange touched a low of 1,575 ringgit ($445) per tonne on Tuesday, almost two-thirds below a record high of 4,486 ringgit hit in March.
In March, India banned vegetable oil exports for a year, even though the country only sold small amounts of groundnut oils. "There is a suggestion from edible oil manufacturers to allow exports of groundnut oil. We will take a decision today after looking at stocks," Pawar said.
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