Business | Economy
India and Vietnam to slash rice exports
Major rice exporters Vietnam and India said they will curb overseas sales more in an effort to combat food inflation, threatening to heighten the world's anxiety over staple food supplies.
- Reuters
- Published: 00:38 March 29, 2008
Hanoi, New Delhi: Major rice exporters Vietnam and India said they will curb overseas sales more in an effort to combat food inflation, threatening to heighten the world's anxiety over staple food supplies.
Hanoi confirmed it will cut rice exports by 22 per cent this year from last. India raised the minimum sale price for rice exports by more than 50 per cent, effectively ending overseas sales of all but the highest quality grades.
These are the latest measures by governments from Manila to Cairo to ensure sufficient supplies for their expanding populations at a time when global stockpiles have halved and prices have doubled to multi-year highs.
While consumer nations like the Phillippines fret over food security, big producers are aiming to tame inflation by keeping more supplies at home to drive down domestic prices.
In Vietnam, consumer prices rose by nearly 20 per cent in March, the highest in more than 12 years, while India's wholesale price inflation has surged to a near-14 month high, posing a major policy challenge at a time when economic growth is slowing.
Vietnam, the world's second-biggest exporter, will limit rice shipments to 3.5 milliion tonnes, down from 4.5 million last year, in order to stabilise prices, a government statement quoted Prime Minister Nguyen Tan Dung as saying, after Hanoi imposed a limit for the first 10-month shipment last week.
"Vietnam will save 1 million tonnes of rice for northern provinces and will see prices easing following this cut," said a rice trader at a foreign firm in Ho Chi Minh City, Vietnam's largest grain trading market.
India, which could overtake Vietnam this year, has raised the minimum export price for non-basmati rice to $1,000 per tonne from $650 to protect domestic supplies. It also scrapped tax incentives for exporters of non-Basmati rice to try and tame price pressures in Asia's third-largest economy.
"The government's move is aimed at a complete halt of non-basmati rice exports," said Prem Garg, managing director of Lal Mahal Group, a leading rice exporter.
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