Ban on export of rice – worried traders and partial relief from DGFT
Kakinada is a minor port in Andhra Pradesh which accounts for the largest export of rice which is a source of good income for a large number of millers, plastic bag manufacturers, farmers and a horde of officers. But suddenly everything has come to a standstill with the DGFT’s banning of export of rice announced by Notification No. 38 dated 15.10.2007 but with effect from 9.10.2007. Huge stocks of rice are held up in the port with Customs not allowing the export, exporters are not able to pay the millers and the millers in turn are not able to pay the farmers.
The millers of rice rich Andhra Pradesh met the Chief Minister with an SOS message. The Hon’ble CM does not understand much of economics or commerce but promised to help.
Some seven lakhs tons of rice is waiting at various ports and ships are also waiting and the exporters will face several liabilities like Demurrage and detention charges for vessels and international arbitration proceedings for shipment default.
In a country that produces around 900 lakh tons of rice a year, this 7 lakh tons will hardly make any difference but it will kill a few exporters and farmers!
Now in partial relaxation of the ban from 9.10.2007, the DGFT has amended Notification No. 38/15.10.2007 to add a rider that “However, rice brought into the port godowns for export till 10.10.2007; as certified by port authorities; shall be allowed to be exported.”
A great relief at least so far as the goods lying in ports are concerned but there is still an another category – that which have been handed over to the exporter by the millers but which might not have reached the Customs. This rice will have to be now returned to the millers – a huge loss of at least transport charges!
DGFT NOTIFICATION NO. 43 (RE – 2007)/2004-2009 , Dated: October 24, 2007