The Hindu Business Line : A tale of two cereals

There cannot be a more contrasting tale of two fine cereals. While precarious stocks and costly imports of wheat are giving the Centre sleepless nights, it is just the reverse where rice is concerned. Not only are stocks ruling above buffer norms, there is also an unprecedented export boom under way.

"We see non-basmati exports alone crossing $1 billion this fiscal," said Mr Karan Chanana, Managing Director of Amira Foods (India) Ltd and General Secretary of the All India Rice Exporters' Association.

In 2005-06, the country exported 39.05 lakh tonnes (lt) of non-basmati rice worth Rs 4,144.03 crore. This is over and above the 11.61 lt of basmati exports worth Rs 3,030.32 crore.

During the last five years, non-basmati exports have jumped five-fold, which has gone unnoticed relative to the high-profile basmati shipments.

The boom in non-basmati started with the Food Corporation of India (FCI) issuing rice to exporters from its overflowing warehouses. Between 2000-01 and 2003-04, some 140 lt was made available from the Central pool for exports.

Since 2004-05, FCI has discontinued supplying grain. But that has not put a brake on exports.

"The market is mostly Africa: Nigeria and South Africa for par-boiled rice (five per cent broken) and the rest of the continent for raw rice (25 per broken)," said Mr Anil Mittal, Chairman of KRBL Ltd.

Interestingly, the 39-40 lt of annual non-basmati rice exports is almost equal to the wheat imports that the State Trading Corporation (STC) has so far contracted for the Centre.

Thus, for each tonne of wheat coming in, an equal amount of rice is going out of the country. That again reflects the contrasting availability position.

As of July 1, rice stocks in the Central pool, at 111.44 lt, were higher than the minimum buffer of 98 lt for that date. For wheat, these stood at 82.07 lt and 171 lt respectively.

Also, while FCI and State agencies procured only 92.23 lt of wheat during the 2006-07 rabi marketing season (April-June), rice purchases in the ongoing 2005-06 season (October-September) have touched 279.22 lt till August 21 and are slated to close at 285 lt.

What is more, with kharif paddy area registering 5.6 per cent increase so far this year, the rice export party is likely to only continue.