Not looking to lift curbs on export of food items: Goyal | Latest News India - Hindustan Times
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Not looking to lift curbs on export of food items: Goyal

By, New Delhi
Jan 14, 2024 05:38 AM IST

The government is also constantly watching the crisis in the Red Sea, a major sea route for Indian exports, which is witnessing a violent regional spillover of Israel’s war with Hamas, Goyal said

India will not remove export bans on rice, wheat, onion and sugar any time soon, commerce minister Piyush Goyal said on Saturday, stressing that the government’s priority was to cool domestic prices.

In May 2022, the government banned overseas sales of wheat, followed by a prohibition on the export of rice and onion in 2023 (HT Photo)
In May 2022, the government banned overseas sales of wheat, followed by a prohibition on the export of rice and onion in 2023 (HT Photo)

“As of now, there is no plan to remove export restrictions. Our priority is to keep food affordable to the poor and the middle-class and by stepping up procurement, balance the interests of farmers and consumers,” Goyal said. Procurement refers to the government’s buying of food commodities from growers at federally fixed floor prices.

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The government is also constantly watching the crisis in the Red Sea, a major sea route for Indian exports, including basmati rice, which is witnessing a violent regional spillover of Israel’s war with Hamas, the minister said.

“More alternate routes will be explored if it escalates further,” Goyal said. “We are talking to Export Credit Guarantee Corporation to lower interest rates for exporters, including basmati traders.”

Yemen’s Houthi rebels have been attacking cargo vessels in the Red Sea in support of Hamas in Gaza, prompting the US and the UK to retaliate. Most Indian vessels are going around the Cape of Good Hope, avoiding the Red Sea, commerce secretary Sunil Barthwal said at the briefing.

India, the world’s second-largest wheat grower, will not import the staple, contrary to speculation, or slash import tariffs because the government expects a bumper winter crop of 114 million tonne from the spring harvest, Goyal said. Wheat is sown in November and harvested in March.

The central government led by the Bharatiya Janata Party, which faces a general election next month in which Prime Minister Narendra Modi will seek a third term, has been battling high food prices after extreme weather cut output of cereals and vegetables for two years in a row.

In May 2022, the government banned overseas sales of wheat, followed by a prohibition on the export of rice and onion in 2023. The country is the world’s largest rice exporter, with a 40% share in global shipments. Premium basmati rice is not covered by the ban.

India’s annual retail inflation rate rose at the fastest pace in four months to 5.69% in December, driven by food items, which analysts say might lead the central bank to avoid immediate interest rate cuts.

Food prices were now largely under control, coming within the Reserve Bank’s upper limit of 6%, Goyal said. “Prices are under control and have stabilized. There was a time when inflation would be in the range of 14-15%. Wheat prices have come down, barring minor ups and downs,” Goyal said. The government could consider more steps to cool rice prices, he added.

It has set up a ministerial committee to monitor the Red Sea situation on a daily basis for a “quick response”, the commerce secretary said, saying that there are no immediate threats to exports of basmati rice.

The government had ensured that onion farmers don’t suffer due to a ban on overseas shipments of the item by launching open-ended procurement, Goyal said. “Nafed is procuring onions for farmers at good rates. It is currently buying at nearly 18.16 and 19.70 (a kilo) from places such as Ahmednagar and Nashik (in Maharashtra),” the minister said. Nafed is a state-owned food trading agency.

Cereals and vegetables were cheaper in December, compared to November, but there was no let-up in the growth of overall food prices. Food price inflation leapt to 9.53% in December, compared to 8.70% in the preceding month. Higher costs of food impact poorer households more than the well-off since the former tend to spend a larger share of their of the monthly budget on it.

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  • ABOUT THE AUTHOR
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    Zia Haq reports on public policy, economy and agriculture. Particularly interested in development economics and growth theories.

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