India weighs rice diplomacy, wheat stockpile

By Mayank Bhardwaj and Jonathan Leff

NEW DELHI (Reuters) - India will decide by June whether to sell rice to some neighbouring states that have asked it to resume shipments, but has no plans to significantly relax export curbs soon, a top food ministry official said.

The world's second-biggest rice exporter in 2007, India banned all non-basmati rice shipments in March, one of a series of protectionist measures worldwide that triggered a wave of panic buying, causing benchmark Thai prices to nearly treble.

The rising price of staples like rice -- called a "silent tsunami" by the World Food Programme -- has sparked violent protests from Haiti to Somalia, and heightened fears that the world's poor may soon struggle to feed themselves.

"There are some requests from certain countries at diplomatic levels," T. Nand Kumar, the country's food secretary, told Reuters in an interview, the first time an Indian official has acknowledged pressure from other nations to resume sales.

"I suppose they will be looked at rather than an open thing on exports."

India is also likely to take advantage of this year's bumper wheat harvest to establish a government-run stockpile of up to 3 million tonnes, Kumar said, confirming speculation about New Delhi's plans for a strategic reserve following two years in which it was forced to import extra grain.

The two issues underscore the growing anxiety around the world over food supplies at a time when the price of key grain crops has doubled or more in the past year, and highlight the delicate balance India faces in maintaining good international ties even as it curbs shipments to fight domestic inflation.

The Asian Development Bank and others have criticised export bans or barriers they say distort trade and create the misleading impression of a supply crisis in a market where only about 7 percent of world production is openly traded.