India May Keep Export Curbs On Normal Monsoon.

India, the world’s second-largest wheat, rice and sugar producer, may retain export curbs even if a normal monsoon boosts farm output because inflation remains elevated, according to Adani Wilmar Ltd.

The rainfall is critical to crop production in the country, which relies on imports of commodities including cooking oils and lentils, said Atul Chaturvedi, chief executive officer at Adani Wilmar, the nation’s biggest farm-goods trader. The first forecast for the annual monsoon will be made in the third week of April, India’s weather bureau said Wednesday.

An extension of curbs on Indian shipments of rice, wheat and sugar may further strain world supplies and keep global food costs at the record levels reached last month. The nation’s central bank last week raised its inflation forecast a second time in three months amid surging costs of food and fuel.

“Opening up of exports in India is not a 100 percent rational or economic decision,” Chaturvedi said in a phone interview from the western Indian city of Ahmedabad yesterday. “It is largely a political decision, and no politician worth his salt would be willing to put his neck in front when food inflation is in excess of 10 percent.”

India will keep controls on food exports including edible oils and lentils and ease import curbs on certain commodities to contain the threat of rising inflation, the government said on Jan. 13. The government banned exports of non-basmati rice in April 2008 and wheat in early 2007 to bolster domestic supplies.

Record harvests in the ensuing years and purchases from farmers had swollen stockpiles of rice, wheat and other grains to 46 million tons in state warehouses as of March 1, according to Food Corp. of India.

India relies on the June-to-September monsoon, which provides more than 70 percent of the nation’s annual rainfall, to allow its 235 million farmers to sow crops from cotton to rice and soybeans.

“The role of the monsoon can never be underplayed in the Indian context,” Adani’s Chaturvedi said. It’s too early to speculate on what rainfall the monsoon will bring this year.

Monsoon rain was 102 percent of the 50-year average last year, helping drive India’s wheat, cotton and corn production to a record. It followed the worst rainfall in 37 years, which ravaged crops and slashed farm supplies.

Food inflation in India has stayed above 10 percent for most of this year after unseasonable rain damaged vegetables and fruits. Prices accelerated to 10.05 percent in the week ending March 12 after costs of fruits, vegetables and poultry rose, the Commerce Ministry said Thursday.

World food prices rose to a record in February, driven by surging dairy, grain and meat costs, according to the United Nations Food and Agriculture Organization. Commodity prices surged this year as bad weather ruined crops from Canada to Australia and Russia banned grain exports, contributing to riots across North Africa and the Middle East.

An index of 55 food commodities rose 2.2 percent to 236 points that month, from 230.7 in January, its eighth straight gain, FAO said March 3. The World Bank reported last month that 44 million people have been pushed into extreme poverty since June because of rising food prices.

“The trouble was last year India had a huge crop, but the world wasn’t all that blessed,” Chaturvedi said. “Coupled with that, so much cheap money floating around in the world has resulted in commodity prices being hiked.”

Source : hurriyetdailynews.com