India: No Foodgrain Exports From Government Stocks .

NEW DELHI -- India won't allow any grain exports from surplus government stocks as it is worried about high food inflation and wants to preserve supplies to meet a proposed food security law, Food Minister K.V. Thomas said Friday.

"We have to be cautious as we will need enough foodgrains...once we introduce the food security law," he told reporters.

The food security law, which guarantees cheap grain supplies to the majority of the country's population, is expected to be introduced in parliament in December.

The government also wants to preserve more of its stocks as it is worried about runaway food inflation, although grain prices have risen largely because of higher prices paid to growers rather than a supply shortage, the minister said.

Food prices have remained high for several months, driven by growing demand for high-protein foods due to increasing prosperity. In the week ended Oct. 8, India's food inflation recorded a double-digit rise, the quickest pace in six months.

Mr. Thomas also said the government will be monitoring the quantity of foodgrain being shipped out of the country after allowing exports in September, but added that they will continue so long as there is no domestic shortage.

India's foodgrain stocks are currently double the government's requirement.

So far around a million metric tons of common-grade rice and 100,000 tons of wheat have been exported from the country since a ban on shipments was lifted, traders say.

"Once the food security law is introduced, both the output and the government's procurement from farmers, as well as storage mechanisms will need to be increased," the food minister said.

The government procures around 30% of the country's total foodgrain output, which was estimated at 241 million tons in the crop year ended June 30. The output is expected to rise to 245 million tons this year.

Source : online.wsj.com