RICE EXPORT BAN TO CONTINUE DESPIT GOOD HARVEST FORECAST

Although the government is expecting bumper rice harvest this year due to good monsoon, it has no plan to relax ban on rice exports, Agriculture Minister Sharad Pawar said Wednesday.

Speaking on the sidelines of a programme organized by the Indian Council of Agriculture Research (ICAR) here, Pawar said the government would reconsider the ban onlu after it assessed the harvest by October-November.

India ,like other Asian rice exporters, banned exports in April to safeguard domestic supplies and to slow food-price inflation. India is the world’s biggest rice producer after China.

According estimates, India will produce an additional 3million tones of rice in the next crop season following an increase in high price realization the farmers received this year.

In the crop year that ended in june 2008, India produced an all-time high of 95.68 million tones of rice . According to the agriculture department, the area under tice cultivation in India rose to 5.6 million hectares till july 7, from 4.71 million hectares a year ago. Pawar indicated that the harvest of corn and soyabean will also be good, thanks to monsoon rains and higher incentives for fertilizers given to farmers.

The production of cotton and sugar are likely to be affected as states like Maharashtra, Andhra Pradesh, Karnataka and Tamil Nadu, Where these crops are largely cultivated, received less than normal rain. “We are also monitoring the situation,”he said . Asked if the government has any plan to release some states which have good production of wheat have good production of wheat have been asked toregulate its prices and distribution.

The government has banned wheat exports,since 2006 to ensure domestic availability and check rising food prices. According to afficials , the government produced 22.2 million tones of wheat from farmers and may sell the grain in the open market to cool prices.

Wheat Imports ruled out

The Union Goverment is not considering the import of wheat as it is hopeful of purchasing sufficient quantity from the domestic market to keep a buffer stock, the Agriculture and Food Minister, Mr Sharad Pawar, said here.

"We have no immediate plan for wheat import. The condition of wheat crop is good and the risk peiod is over," he told newsmen. "Efforts are on to be self-sufficient. Our approach is to improve production and productivity", Mr.Pawar added.

Replying to a query about whether the government was considering a bonus over and above the minimum support price (MSP) of wheat, Mr.Pawar opened that the current MSP was attractive enough to effect purchases from the domestic market.

Spices exports set scorching pace to overtake fiscal target in 11 months

Spices exports have corssed the fiscal target fixed by the Spices Board in February itself. Exports have exceeded the target by 107 percent in dollar terms, by 105 per cent in rupee terms and by 99 per cent in volume terms. During April-February 2007-08, around 3,77,000 tonnes of spices and spice products valued at Rs.3,785.40 crore ($.940.47 Million) were exported. The target fixed bythe Board for the fiscal was 3,80,000 tonnes valued at Rs.3,600 crore ($.875 million).

Exports registered an increase of 16 per cent in volume and 19 per cent in rupee value terms (34 per cent in dollar terms), when compared to the same period of 2006-07. Exports of pepper, chilli, curry powder and mint products exceeded their respective targets both in terms of volume and value. Exports of coriander and cuminseed exceeded the target in value terms and those of vanilla in volume terms. Exports of pepper went up by 20 per cent in volume and 68 per cent in value, as against 26,415 tonnes valued at Rs.276.79 crore in 2007-07.

Plea to waive export ban on premium Oils

Edible oil traders have urged the Union Government to exempt premium oils from the Export ban as also non-conventional oils, like rice bran oil.

"The edible oils exported are of premium quality only, which contitutes less than half a percent of the total consumption", a Solvent Extractors' Association of India (SEAI) spokesman pointed out.

Traditionally, small volumes of premium (conventional) edible oils like coconut oil, sesame oil and mustard oil in consumer packs are exported. Also exported are vegetable fats like sal, mango kernel and kokum, which are used as cocoa butter substitutes in the manufacture of chocolates.

It had taken the trade many years to make in-roads into global markets. Indians settled abroad purchased the oils, Mr Sanjay Shah, Chairman of Indian Oilseeds and Produce Exporters' Association (IOPEA) pointed out.

Groundnut oil, sesame seed oil, safflower oil and coconut oil were not extracts of mass consumption, while palm oil and soyabean oil were now being imported, it was explained.

Drawback rates raised; exporters seek more

New Delhi, Dec 15 The Finance Ministry increased drawback rates in the for certain items in the textiles sector. The exporting community has, however, expressed disappointment over the move, stating that the duty drawback increase was too little too late.

Under duty drawback scheme, customs duty, excise duty and service tax paid on inputs are refunded to the exporter of finished products .

Cost data


Official sources said that the latest increase has come about only after analysing the cost data submitted by various textile export promotion councils.

While releasing the third package of rupee appreciation relief measures , the Finance Minister, Mr P Chidambaram had told Parliament on November 29 that he had asked councils to provide inputs to the drawback committee. He had said that a decision would be taken on the basis of the recommendation of the committee.

More increase


Reacting to the latest changes in the drawback rates on textile items, Mr Ganesh Kumar Gupta, President of Federation of Indian Export Organisations (FIEO), an export promotion body, said in a statement that the enhancement does not offset the lossesfrom appreciation of rupeeand would hardly increase the competitiveness of the textiles sector.

Not enough

FIEO said that most of the increase for the garment sector was in the range of 0.25 per cent to 1 per cent and 0.8 per cent to 2 per cent for carpets.

Mr Gupta said the industry had demanded an increase of 4-5 per cent in the drawback rates .

FIEO has urged the Finance Ministry to further enhance drawback rates by 3 per cent for textiles sector and between 4 to 5 per cent for other sectors using indigenous inputs.

India`s export growth is not just oil-driven

India’s export growth is being fueled by not only petroleum products but also by non-oil goods like engineering products and gems and jewellery.

If these sectors are taken out, the growth during the first four months (April-July) of 2007-08 comes to 14.77 per cent, as against the 19.26 per cent overall (in dollar terms).

Experts say the increase in exports from these sectors is mainly due to high-value imported inputs. As input costs are high, the final product has a higher value, said KT Chacko, director, Indian Institue of Foreign Trade.

Value-addition in gems and jewellery and petroleum products is minimal and so exports from these sectors do not benefit the economy much, he said.

Gems and jewellery exports rose by 24.82 per cent in April-July against a dip of 0.12 per cent a year ago. This added valuable momentum to exports during the period as the sector comprises 12.59 per cent of India’s merchandise exports.

Industry sources say the increase can be attributed to slashing of the import duty on jewellery this year. As a result, the jewellery items that are not getting sold are being imported, added value to and then exported.

Another sector which added to the growth was the engineering goods, which comprise machine tools, instruments, transport equipment and manufactured metals products. The sector constitutes one-fifth of the total export basket and exports from it grew 22 per cent.

Though this growth was much lower that the 32 per cent in the year-ago period, it added muscle to the growth in the April-July period.

The engineering sector maintains that the growth is only in value terms as prices of steel have increased by as much as 70 per cent in the last three years.

In volume terms, the growth has not been much, and this will effect the bottom lines of the companies this year, said Rakesh Shah, chairman, Engineering Export promotion Council.

Obviously, one of the major reasons for the export growth is petroleum products, which comprise 17.5 per cent of the export basket.

According to experts, the effect of the appreciation of the rupee is most evident while taking into account the growth rate in rupee terms.

The decrease in exports in dollar terms is a pointer to the fact that the capacity of exporters to export is decreasing as the rupee is appreciating. With a strong rupee, an exporter may not find the business worthwhile, said Chacko.

Shrimp exports under threat

The country's shrimp exports are facing a serious threat from low-cost Litopenaeus Vannamei shrimp produced in countries such as Thailand, China, Indonesia and Vietnam. Most of the shrimp importing nations, especially the US, prefer Vannamei shrimp to Indian Black Tiger variety in the 21-25 segment (1 kg consists of 21-25 shrimps) because of the former’s lower price tag.

The arrival of this shrimp in the global market has seriously hit Indian exports, which is already reeling under pressure due to the rupee appreciation.

According to Seafood Exporters’ Association of India (SEAI), the average per kg price realisation of Indian shrimp has gone down in all varieties during the last two-three years. The average price of Indian shrimp in the 21-25 segment has gone down to Rs 399 from Rs 495 in 2005-06.

A J Tharakan, president, SEAI said thanks to the low cost of production in Thailand, Vietnam, Indonesia and China, these countries could offer the product at much lower prices, threatening Indian exports. The average cost of production of Vannamei is Rs 90 a kg while that of Black Tiger is over Rs 160.

The issue has become serious as shrimp was India’s major item in the export basket, he said. The commodity has always fetched a higher unit value compared with other products such as frozen fish, cuttlefish and squid.

Frozen shrimp contributes more that 53 per cent of the country’s export earnings from marine products. Of the total export receipts of Rs 8,363.53 crore in 2006-07, Rs 4,506.08 crore was from shrimps alone.

The country produces 150,000 tonnes of shrimps a year that mainly comprise Monodon (Black Tiger), Indicus (white) and Macrobrachium Rosenbergii (fresh water scampi) species. China produces 650,000 tonnes, Thailand 450,000 tonnes, Indonesia 400,000 tonnes and Vietnam cultures 350,000 tonnes. Vannamei accounts for 90 per cent of the global shrimp aquaculture.

Tharakan said the government should allow Vannamei culture in the country in order to compete with other Asian nations. In spite of repeated pleas from SEAI, the government has not allowed aquaculture in this species citing ecological issues.