Rice Exports Halted On Delhi High Court Order.

The Directorate General of Foreign Trade (DGFT) said on Friday it has halted the process of rice exports following an order by the Delhi high court that is hearing a trader’s petition challenging the process of online applications to get export quotas.

“Operation and implementation of the allocation made in terms of Trade Notice No. 13 of 27.07.2011 (DGFT’s notification giving names of selected exporters) is stayed in view of the order passed by Hon’ble High Court... and will be subject to outcome of the case,” a DGFT notification said.

In the petition, exporter Kannu Aditya (India Ltd) said the company could not get selected as an exporter because technical difficulties made it impossible for it to submit its application online with selection based on the first-come-first-served principle.

DGFT had invited exporters to submit bids for rice export quota allocations on 19 July and received the Delhi high court’s notice on Wednesday.

The chairman of the All India Rice Export Association in the non-basmati rice committee, Prem Garg, said that the next hearing of the case will be on 10 August.

On 11 July, a group of ministers had approved the export of one million tonnes (mt) of rice to reduce huge stockpiles. Exporters lauded the move as the international prices were high and there was demand from the Middle East and South Africa.

But the high court’s stay will put the government in a bind as the Food Corporation of India (FCI) will have to continue holding stocks in excess of buffer norms and worry about storage space for the new crop from the kharif harvest due in October.

“DGFT’s procedure is wrong. It should be transparent and fair,” said Garg. He alleged many of the 82 short-listed firms were not genuine exporters and had applied to DGFT simply to get quotas to sell to other exporters.

“Ultimately, these companies will come to genuine rice exporters and have them arrange all the paperwork and simply act as their conduit for exporting rice,” Garg said.

All India Rice Exporters’ Association president Vijay Setia said around 7,000 companies had applied for the application whereas only about 200 rice exporters existed in India.

Garg said that the petition for further hearings would be amended and the process of selecting 82 companies will also be challenged.

Traders face the prospect of being too late for the export market for rice as the current price advantage may be lost.

Unlike wheat, rice prices in India are lower than international rates, raising the prospect of big gains for exporters.

Thailand has been selling rice for approximately $550 (`24, 310) a tonne in the international market, while the minimum export price set by DGFT was $400.

“Everything is in a state of limbo,” said Atul Chaturvedi, chief executive officer at Adani Wilmar Ltd, one of the 82 short-listed companies.

“With all this flip-flop, I don’t know how this thing will pan out. It is not something which is giving a good signal to the world,” he said.

Source : livemint.com