Shares of rice companies, including KRBL, LT Foods, and Kohinoor Foods, experienced significant gains of up to 15% on the Bombay Stock Exchange (BSE) following the government’s decision to remove the minimum export price (MEP) of $950 per tonne for basmati rice on Friday.
Kohinoor Foods saw its shares rise by 15% to a high of Rs 44.85 for the day, while KRBL’s shares increased by 6.6% to Rs 324.30. Chaman Lal Setia Exports’ shares also climbed by 6% to Rs 244.10. Additionally, Adani Wilmar’s shares grew by 4% to Rs 375.85.
With the removal of the export price restriction, exporters have begun receiving inquiries from international buyers interested in sourcing basmati rice from India. This development is expected to help stabilize the price of basmati rice, which had been declining due to reduced global demand. Initial projections suggest wholesale prices for basmati rice may rise from Rs 55 per kg to Rs 65 per kg before stabilizing.
Last October, the government had previously lowered the MEP for basmati rice from $1,200 per tonne to $950 per tonne in an effort to curb the illegal shipment of non-basmati rice, which had been banned in July.
In the fiscal year 2024, India exported a record 5.24 million tonnes of aromatic rice, valued at $5.83 billion. According to Vijay Setia, past president of the All India Rice Exporters Association (AIREA) and managing director of Chaman Lal Setia Exports, the recent policy change is anticipated to enhance market stability and increase export activity in the coming weeks.
Previously, some buyers had shifted their purchases to Pakistan due to the MEP, as Pakistan offered basmati rice at lower prices. India’s geographical indication-tagged basmati rice, grown in regions such as Punjab, Haryana, western Uttar Pradesh, Jammu & Kashmir, and Uttarakhand, continues to command a premium in global markets. India dominates the aromatic rice market, holding about 80% of global exports, with Pakistan accounting for the remaining 20%.
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