Government to wait until August to review farm exports policy

India, the world's second-biggest producer of rice, wheat, sugar and cotton, will wait until August to review its export policy on farm commodities as the monsoon scenario will be clearer by then, the country's food minister said.

India allowed exports of sugar, wheat, rice and cotton after a bumper harvest last year.

But below-average monsoon so far this year has raised concerns over food supply and started to fuel prices of some food articles.

"Wait till August," Food Minister K V Thomas said on the sidelines of a conference on Wednesday, to a query about whether unrestricted export policy on rice, wheat and sugar would be reviewed due to the weak monsoon.

The country has exported 1.5 million tonnes of wheat and 5 million tonnes of common grade rice since September 2011, farm minister Sharad Pawar said on Monday.

India exported 11.5 million cotton bales of 170 kg each so far in the 2011/12 season that began on October 1. It shipped 2.5 million tonnes of sugar during the same period, Pawar said.

Monsoon in India has been 22 per cent below average since the four-month season began on June 1, weather department data shows.

More than half of India's arable land is rain fed, and the farm sector contributes around 15 percent to Asia's third-largest economy.

"We are examining the option of imposing stockholding limits. If it is needed, then this option can be opted for," Thomas said. Price rise in pulses is a concern, but supply of other food grains like wheat and rice are ample.

The Indian government's wheat stocks were at 49.8 million tonnes on July 1, much higher than 17.1 million tonnes targeted for the quarter to end-September. Rice inventory for the same period was 30.7 million tonnes compared with a target of 9.8 million tonnes.

India's headline food inflation in June rose 10.81 percent from a year ago period as prices of vegetables and pulses rallied.

Copyright @Thomson Reuters 2012