The import duty on rice varieties were under zero tax law for the past two years from 2009 as the rice production in India remained low during the period due to drought-like conditions and weak monsoon. The tax was first introduced in 2002 on having high production and was lifted in 2009
The officials are of the opinion that unless import taxes are imposed, there exists the possibility of rice being imported and then re-exported to book profits.( The international rice prices are currently staying low and hence profit booking through exports is a viable option.); The Business Standard reported.
As per the data available from the Agriculture Ministry, the rice production in the country is forecasted to rise to 102 million tons in 2011-12 crop year from 95.32 million tons in 2010-11.The acreage increased 6% to 26.03 million hectares as of August 2011, from 24.47 million hectares in the corresponding period last year.
Take the case of Indonesia, where the government, in the name of food security (the country had been hit by floods recently) is importing around 1.5 to 1.6 million tons of rice despite having a huge surplus, thereby endangering farmer livelihood. This is in sharp contrast to Philippines, which had stopped rice imports even though the country had been hit by typhoons.
According to the Food and Agricultural Organization (FAO) of the United Nations, the world rice production may hit record 480.5 million tons on the back of great crop prospects in Asia (especially in India, Bangladesh, China and Indonesia), Egypt, Argentina, Mozambique, the US and Russian Federation.
Meanwhile, on the CBOT, rice futures had rose to a one month high as rice production in Asia has been hit by typhoons and floods.