India set to exempt Africa from ban on rice exports
By Joe Leahy in Mumbai and Amy Yee in New Delhi
Published: June 2 2008 03:00
India is facing growing pressure from African countries to exempt them from export bans on rice implemented by New Delhi to curb domestic food price inflation.
The move illustrates how efforts by large producers such as India to control a sharp rise in food costs are hurting poor nations and giving rise to a form of rice diplomacy."We have no shortage of rice and wheat. Our buffer stocks are adequate. Our production has not been reduced. Food prices are driven to a large extent by sentiment and not merely by supply and demand, says the indian minister
"I have a minister from Mali [here]," said Kamal Nath, India's commerce and industries minister, in an interview with the Financial Times.
"They are traditional buyers of rice so when we banned the export of our cheaper medium-quality rice, they [were] in trouble."
Global food prices are expected to remain high over the next decade, spelling hardship for millions of the world's poorest, the United Nations' Food and Agriculture Organisation and the Organisation for Economic Co-operation and Development said in a report last week.
Mr Nath said India had already allowed some exports to Sierra Leone and would consider other exemptions for Africa. "We will have some carve-out to African countries depending on our own current production," he said.
He did not give details but there is speculation that India might eventually export about 2m tonnes of rice to the least developed African countries as well as some neighbouring nations, including Bangladesh, Nepal and Bhutan.
The move fits with India's growing diplomatic efforts to woo African nations and counter China's rising influence in the resource-rich continent.
India's economy continues to grow strongly, reaching a rate of 9 per cent in the last fiscal year, according to government figures released on Friday.
The new report predicted growth of 8.5 per cent this year but the rising cost of fuel has contributed to a sharp jump in inflation. In the 12 months ended May 17, it reached 8.1 per cent, a three and a half year high and well above the central bank's target of less than 5.5 per cent.
Mr Nath said the price of imported cooking oil and lentils had more than doubled "not because of India-supply stress but international supply-side stress".
He said: "We have no shortage of rice and wheat. Our buffer stocks are adequate. Our production has not been reduced. Food prices are driven to a large extent by sentiment and not merely by supply and demand."