AP crackdown on ration rice diversion for exports halts shipments from Kakinada port
One ship, mv Stella L, has been held up at the Kakinada port, while another, QC Penny, will likely return without loading any rice consignments following confusion over the Andhra Pradesh government’s crackdown on the diversion of ration (public distribution system) rice for exports.
“Officials themselves are confused over the whole development. They are not sure what the actual violation is, though they are seizing some consignments and filing first information reports (FIRs),” said a South India-based trading source, who did not wish to be identified. Rice exports from the port have come to a virtual halt.
- Also read: CCPA issues notices to 17 direct selling firms for violation of regulations
The ship mv Stella L has been held up at the Kakinada port after Andhra Pradesh Deputy Chief Minister Pawan Kalyan seized 640 tonnes of rice allegedly diverted from ration shops on November 30.
Service providers’ fears
“While some cargoes of white rice have been seized, there are consignments of parboiled rice that are not diverted from PDS in the ship. Oral orders have been given to not load any rice consignment on the ship. We approached government officials but so far nothing has happened to help exporters,” said the trading source.
The development has resulted in the Coconada Chamber of Commerce issuing an advisory to logistics service providers and handlers to avoid rendering services to exporters of white rice.
- Also read: Southern States recorded more number of road accident cases in the last 4 years: IRAD
Trading sources said the advisory has been issued as these providers are the agents who control the shipments before loading and they are being held responsible for something that is beyond their control.
“It is an advisory only. If service providers want to help exporters of white rice, they are still free to go ahead,” said an official of the chamber of commerce.
Rising costs
When contacted, officials in Andhra Pradesh said investigations into cases of diversion of PDS rice will progress as per law and they would not want to comment anything on the issue. The State Government has formed a special investigation team to investigate the cases of illegal export of PDS rice in Kakinada district. So far, the State government has filed 13 FIRs against diversion of ration rice.
A North India-based exporter said merchant ship QC Penny had waited for berthing at the port for a few days to load rice under a government-to-government deal. The developments at the port have resulted in the shipping firm deciding to return without loading any consignment.
- Also read: CCPA issues notices to 17 direct selling firms for violation of regulations
The South India-based trade source said logistics service providers lacked legal and financial resources and were wary of handling white rice consignments. They are also worried over social repercussions too in the event of any action by government officials.
The problem for exporters is that their overall costs are rising as ships include additional costs while waiting, while other costs such as consignments being held up at warehouses also rise.
Political battle?
Some traders say they are caught in a political battle but officials deny there is anything political to the whole issue.
Andhra Pradesh Chief Minister N Chandrababu Naidu told his officials that vigilance officials have got a lot of information on PDS rice being diverted for exports and the “system is corrupt”. He said his government wanted to firm against the “mafia” that is involved in this.
- Also read: Switzerland suspends MFN clause with India under tax treaty, cites SC ruling in Nestle
On the other hand, former chief minister YS Jagan Mohan Reddy has criticised the State Government for the imbroglio. “This government took over six-and-half months ago. It is all their men who hold the posts to take action. Still, they accuse me of being behind this rice diversion,” he said, adding that one of the top exporters was related to a State Cabinet minister.
