New Delhi, April 1 - Indian restrictions on rice exports will spur global prices and help fellow exporters like Pakistan and Thailand because overseas sales from India will fall to a fraction of last year's, a trade body said.
Exports from India are likely to fall to 250,000 tonnes this financial year from 5.5 million tonnes in 2007/08, Sanjay Sethia, president of the All India Rice Exporters' Association, told Reuters in an interview on Tuesday.
"Pakistan, Thailand and other exporting countries will make money, while India will lose out," he said.
India banned non-basmati exports on Monday to try to ease pressure on prices, which has pushed wholesale price inflation to a 14-month high.
"It is a hasty decision and needs to be relooked at by the government. Unnecessarily, India could end up inflating world prices," Sethia said.
Governments from Cairo to Manila have announced steps to ensure domestic rice supplies at a time global stockpiles have halved and prices have doubled to multi-year highs.
"I feel that India's exports will now fall to about 250,000 tonnes during 2008/09, as only some traditional basmati rice can be exported," he said.
He said Pakistani and Thai rice traders had increased prices by about $150 to $200 per tonne on some rice grades after India raised the minimum export price for non-basmati rice last week to $1,000 per tonne from $650 per tonne free on board.
On Monday, the minimum export price for basmati was increased to $1,200 per tonne from $1,100.
Trade officials said India exported 5.5 million tonnes of rice in the year to March 31, 2008, up from 3.8 million tonnes last year but that the new restrictions have tempered sales.
Out of the 5.5 million tonnes, 4 million tonnes is estimated to be non-basmati rice and 1.5 million tonnes superior quality rice including basmati.
INFLATION
Sethia said last week's increase in the minimum export price was so steep that it ruled out the export of coarse grades of non-basmati rice, generally given by the government to the poor under public distribution scheme.
He said the Indian government's move would also block exports of superior quality non basmati which is quoted at between $1,200 per tonne and $1,700 per tonne, while basmati rice above $1,200 per tonne could be sold overseas.
The prices for India's superior quality rice compared with $1,100 to $1,200 per tonne in Pakistan.
Sethia said the government's decision to hike the export price limit had already caused local rice prices to fall.
Prices in southern India have fallen to 17 rupees per kg from 20 to 22 rupees (49 to 54 cents) a year ago.
Rising food prices have been a major trigger for India's widely watched wholesale price inflation, which surged to an annual 6.68 percent in mid-March, posing a major policy challenge at a time when economic growth is slowing.
On March 20, the government scrapped the 70 percent import duty on rice, spurring Indian traders to look at the Pakistani market for the possibility of buying rice there.
"People have started checking for the import of rice from Pakistan, milled and semi-milled," Sethia said.
But he added the sudden change in rice export policy was likely to sow confusion in the trade about government policies and the imports may not now materialise.