Govt scraps rice import duty as output dips

The Government scrapped its rice import duty after severe weather hit output, raising the prospect that the world's second-biggest rice consumer could turn a net importer. Any purchases by India could lift Thai rice prices, seen as the benchmark for the market. But Indian domestic prices were too low and imports would be possible only with government subsidy, traders added. India, the world's second-largest producer and consumer of rice after China, has never imported a significant amount of rice in the past. The 70% import tax had been scrapped until September next year, the end of the 2009-10 marketing year. The US Department of Agriculture forecast a 15 million to 17 million tonne decline in India's rice output for marketing year 2009-10 from a record 2008-09 production of 99.2 million tons. India is likely to consume about 90 million tons in 2009-10, leaving a gap of about 8 million tons, but part of the deficit would be bridged from surplus stocks.