India Rice Output to Reach Record, Helping Ease Curbs

By Pratik Parija

Sept. 23 (Bloomberg) -- India, the world's biggest grower of rice after China, may harvest a record crop this year after rains spurred sowing, likely helping the nation scrap the six-month old restriction on exports of the grain.

The monsoon crop, which was planted in June, will be 84.81 million metric tons, Federal Agriculture Commissioner N.B. Singh said in an interview in New Delhi. That's a 2 million ton gain from a year earlier.

``We should really be harvesting more because of well- distributed rain in the main growing areas,'' he said. ``There was timely planting and this has happened after so many years.

A bigger harvest may prompt India to lift the export ban, pressuring global prices that have slumped 21 percent from a record in April. Thailand and Vietnam, the world's biggest rice shippers, have raised export forecasts this year after farmers planted more in response to higher prices.

``Higher production makes a case for relaxing the ban,'' said Vijay Setia, president of the All India Rice Exporters Association, in a phone interview from the northern city of Karnal. ``This is the right time.''

Rice for November delivery rose 1.2 percent to $19.940 per 100 pounds in after-hours electronic trading on the Chicago Board of Trade. The price rose by the maximum permissible limit of 50 cents yesterday. The futures reached a record $25.07 on April 25.

Prime Minister Manmohan Singh's government this month partly eased the ban on overseas sales of premium grade rice. The curbs may be lifted totally after the monsoon crop is harvested, Farm minister Sharad Pawar said in June. The restriction, imposed in April, followed limits on exports of wheat, corn and edible oils to bolster domestic supplies and tame inflation.

``If the government wants to help farmers get a better price it must lift the ban before the crop is harvested,'' Setia said.

Plantings Increase

Farmers in India planted rice on 37.35 million hectares (92 million acres) as of Sept. 18, 3 percent more than a year earlier as rains progressed, according to the farm ministry.

Monsoon rains were more than average in the biggest growing areas in eastern and northern parts of the country between June 1 and Sept. 17, the weather office said. Rainfall was 11 percent above average across the nation in the week ended Sept. 17.

The showers have ``brightened prospects'' for winter-sown crops such as wheat, lentils and mustard, and may help increase the planting area, Singh said.

The monsoon-sown crop, for which harvesting began this month, contributes more than 85 percent of the country's rice production. The winter crop, which is sowed in October, makes up the rest.

India aims to boost this year's winter-sown rice output 2.8 percent to 14 million tons, the farm ministry said yesterday.

To contact the reporter on this story: Pratik Parija in New Delhi at pparija@bloomberg.net.