India warms up to rice exports to UAE

Dubai: India, a major exporter of food items to the Gulf, has promised it will look into ways to boost rice exports to the UAE while it continues to face tight supplies at home.

The country has banned the export of non-basmati varieties of rice to boost domestic supplies, resulting in shortages in key food importers such as the UAE.

The issue was discussed during the meetings His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, and Minister of Economy Sultan Bin Saeed Al Mansouri had with visiting Indian Commerce Minister Kamal Nath.

"We shall discuss it internally to see how we can ensure rice supplies to the UAE,'' Nath told reporters on Thursday. Supplies could improve if the next Indian rice crop is good. "The situation in India is very tight. We are waiting for our next crop to come next month,'' Nath said.

Concern

He said the large expatriate Indian community has also expressed concern to him over the matter as they "need to have rice of Indian origin''.

"We will be looking at finding a way out,'' the minister said.
Basmati is the most popular variety of rice in the UAE and India and Pakistan are the leading suppliers of the commodity.

Several Indian ports, including those in southern states, are not allowed to handle exports of the banned rice varieties.
Egypt, another rice exporter to the UAE, has also curbed its overseas rice sales to meet domestic demand as high food prices have resulted in social disturbances.

Al Mansouri and Nath talked about "the setting of monthly UAE supply requirements to ensure that the country acquires sufficient supplies of basic food items,'' according to the Ministry of Economy.

To prevent food price inflation from getting out of control amid global supply constraints, the Ministry of Economy has resorted to price controls in the local market. It has persuaded the Union Cooperative, LuLu and Carrefour supermarket chains to freeze prices of essential food items at the 2007 level.

However, Nath believes "price caps have very limited use'' in addressing inflation. He believes price caps at the producer level can be effective but not a retail level.