Global rice prices have slumped by half from a record in 2008 as supplies rose and the global recession punctured the commodities boom. Prime Minister Manmohan Singh’s government, returned to power in elections that ended May 16, imposed the ban after political parties protested against rising cooking costs.

“It’s the right time to allow exports as we have a surplus, otherwise food will become feed if it stays in warehouses,” said Vijay Setia, former president of the All India Rice Exporters’ Association.

Prices climbed to a record US$25.07 per 100 pounds in April 2008 after growers including Vietnam and Egypt halted shipments to secure supplies. July-delivery futures were little changed at $11.945 on the Chicago Board of Trade in after-hours trading.

Food Corp. of India, the biggest buyer of grain, has bought a record 28.6 million tons of rice from farmers this marketing season after the government raised the floor price and opened 28,000 centers to collect food grain, said the official. The state-owned agency purchased 28.49 million tons last year.

Exports of non-basmati rice were banned to rein in prices after demand from government welfare programs doubled in five years. The government has since September eased the curbs to allow shipments of a premium-quality grain and supplies to African nations, Nepal and Bangladesh.

The government may also fully lift a ban on wheat exports by ending a limit to allow shipments of up to two million tons, the government official said. Shipments were halted three years ago to bolster domestic supplies.

Source: Bloomberg