With a delayed and scanty monsoon now official, the Indian government is gearing up to keep down commodity prices. On Thursday agriculture secretary T Nanda Kumar announced that India will not lift grain export curbs till monsoon trends are clearer.
''We will be very careful on this,'' Nanda Kumar said about relaxation of curbs on wheat and non-basmati rice exports. Hit by a poor crop and rising global prices, India has restricted exports of wheat and rice in the past two years.
The government yesterday raised the minimum support price that sugar mills must pay farmers for sugarcane. Home minister P Chidambaram, who is also the cabinet spokesman, said that the sugarcane price will be increased to Rs107.76 per 100 kg in the new season from October, up from Rs81.18 in 2008-09.
India is the world's biggest sugar consumer, its second-biggest producer and normally a net exporter, but it was forced into massive imports this year after a freeze on domestic prices discouraged farmers from growing cane.
The cap comes at the tail end of the kharif planting season, but may still encourage more farmers to plant sugarcane instead of other crops, according to commodity watchers.
Kumar said there was a contingency plan in place to combat the impact of a poor monsoon, while agriculture commissioner N B Singh said farmers have been planting kharif (summer) crops and there is as no cause for concern. (See also: IMD's monsoon predictions revised downwards once again)