India may ease curbs on Rice Exports, pressure prices.

India is likely to ease controls over non-basmati rice exports and sell up to 3 million tonnes in 2011 due to burdensome stocks, which could pressure global prices, traders said on Tuesday.

"There is going to be huge pressure coming after the harvest in November and December," said one trader on the sidelines of a regional industry conference in Singapore.

"They will have to sell to reduce stocks. We are expecting around 2 to 3 million tonnes of non-basmati rice exports from India."

In addition to the possibility of India's rice exports, pressure from the harvest in Thailand, the world's top exporter, is expected to weigh on benchmark 100 percent B grade Thai white rice , currently trading around $500 a tonne.

"In all probability, prices should come down from the current levels after November," said another Singapore-based rice trader. "We had Indonesia coming into the market and buying rice but there was not much market reaction."

Indonesia bought 500,000 tonnes of rice from Thailand and Vietnam, marking its biggest purchase since 2007, and the country could be looking for another 700,000 tonnes.

Unlike U.S. corn and wheat futures, which climbed to multi-year highs, rice  the key staple in Asia  has largely stayed stable in the past few months, hovering between $450 and $500 a tonne.

India curbed rice exports in 2007/08 but government stockpiles swelled after subsequent bumper harvests. On Oct. 1, the country's rice stocks stood at 18.4 million tonnes, well above a target of 5.2 million.

"India has had little success with government-to-government deals on rice, so they have to allow the private trade to sell rice in order to reduce the burden of stocks," the Singapore trader said.

The country's farm ministry last month forecast this year's summer-sown rice output at 80.4 million tonnes, up from 75.9 million tonnes produced in the previous year. "It is high time the government allows exports of non-basmati rice," said V.K. Bhasin, vice-president of the Lal Mahal group, a leading New Delhi-based rice exporter.

"Grains are already stocked in open fields and there is hardly any space to store the new season rice. Exports are absolutely imperative."

Thailand, the world's biggest rice exporter, is expected to produce 22.9 million tonnes of paddy in its main 2010/11 crop as drought and then floods had caused only minor damage, an Agriculture Ministry official said last week.

Thailand's second, smaller rice crop, grown mostly in well-irrigated areas in the centre of the country, is due to be sown in the early part of next year and harvesting could start in late June. Thailand produces around 5-7 million tonnes of paddy in its smaller crop.

Source : in.reuters.com