May 31, 2004

India's Grain Exports May Slow To A Trickle
 
The Indian federal government's decision to not offer any subsidies for grains exporters may reduce Indian rice and wheat exports to a trickle, a senior industry official said.
 
"India's grains exports story is almost over. Four years of efforts by exporters to build a reputation for Indian rice and wheat world over has been damaged," said D.B. Singh, chairman of All India Grains Exporters' Association.
 
He said Indian grains were too expensive to be sold in international markets without being subsidized.
 
Friday, India's new Food Minister Sharad Pawar ruled out subsidies to grains exporters procuring grains on their own, as had been promised earlier this year by the previous government.
 
Media reports suggested the previous government was considering 1,000 rupees ($1=INR45.53) a metric ton in subsidy for both rice and wheat exports.
 
Pawar also said he would not allow the federal granary to resume sales of grains to exporters.
 
The federal granary used to sell grains to exporters at low rates, besides offering compensation to exporters for carrying grains from inland warehouses to ports. It stopped grains sales to exporters last August.
 
Since August, exports have been very limited due to the lack of subsidies.
 
Singh said that once Indian grains exporters exit the export market, they will not find it easy to re-enter in the future.
 
"It's not easy to create trust in overseas buyers' mind. And once you break that trust by suddenly exiting the export market, it's tough to get back in the future," said Singh.
 
India exported around 10 million tons of grains in the financial year ended March 31, 2004. India started grains exports in 2000.