NEW DELHI, Dec 5: High prices, slow movement of cargo and lack of fresh orders have brought rice sales in India to a virtual standstill, traders said on Thursday.

They said export shipments of rice were likely to drop sharply to 150,000 tons in December from around 300,000 to 350,000 tons in November.

“The government has increased the price of rice given to exporters and there are not many takers for that,” said Gagan Gulati of exporting firm Global Trading Co.

“Right now deals struck earlier are being fulfilled, no new contracts are taking place.”

India has been aggressive in its rice sales this year, mainly to Southeast Asia, the Middle East and Africa. It is emerging as the world’s second largest rice exporter after Thailand, edging Vietnam to third place.

But sales have been hit in recent weeks with the government in November increasing the price of rice sold to the exporters and the railways slashing the number of rakes allotted to exporters to move the grain to the ports.

State-run Food Corporation of India, which sells grain to traders at subsidised rates, in November jacked up the export price of rice from the new crop by 600 rupees a ton to 6,510 rupees.

It also increased the price of raw rice from the previous crop by 350 rupees a tonne to 6,260 rupees from January 1.

“There is no trade happening at the new prices and most countries had covered up to January in anticipation of the price increase,” said Rajni Kant Rai, of diversified group ITC Ltd.

Traders said shipments meant for Nov and Dec were getting delayed as the railways had cut their monthly allocation of rakes to about 250 against the normal requirement of 450.—Reuters