Import of 2 lakh tonnes of rice from India suspended

The Ministry of Food has suspended the import of two lakh tonnes of parboiled rice from two Indian state agencies – National Cooperative Consumers Federation of India Ltd and Kendriya Bhandar – under a G2G agreement as the price asked for is higher compared to that offered by other international exporters.

The ministry took the decision in a recent meeting considering the fall in rice prices in India, an increase in local Amon procurement and a good amount of rice in reserve. Saving dollar reserves was also considered for suspending the import, said sources in the ministry.

The two Indian companies were supposed to supply 1,00,000 tonnes of rice each at $434 and $437 per tonne respectively. The Directorate General of Food issued a Letter of Intent (LOI) for the purchase on 21 December. After receiving the LOI, the companies started the process of supplying rice.

But in the meantime, the Directorate General of Food invited international tenders for the purchase of another lakh tonnes of rice, where the lowest bidders, Singapore-based Agrocorp International Pte Ltd and an Indian company, asked for $393 and $397 respectively, which is at least $40 less than the prices asked by two Indian companies.

Rice prices in India fell by at least 10% in January. So, the two companies were requested to reduce the price of rice, but they said they can reduce the price by $2 only. That is why it was decided to suspend this import, a senior official of the Ministry of Food told TBS on condition of anonymity.

According to food ministry data, the government procured 3,22,836 tonnes of rice from local farmers and millers till 6 February and the rice stock has stood at 16.13 lakh tonnes. At the same time, due to the import of wheat from different countries, the government now has stocks of 3.84 lakh tonnes of wheat, which was very little last year.

According to the Ministry of Food, it is possible to meet the demand for more than five months with the amount of rice that is in stock now. Various social security programmes including Open Market Sale require 2.5-3 lakh tonnes of rice every month.