LT Foods, KRBL, Kohinoor: Rice Stocks Surge Up To 15% As India Likely To Relax Export Limits

Shares of rice-producing companies were in demand on Tuesday, July 9, with individual stocks surging up to 15 per cent on the BSE in the intraday trade. The upmove comes amid a report that the Indian government is looking to relax restrictions on exports of some rice varieties to avoid a glut in the country.

Rice-related stocks LT Foods, KRBL, GRM Overseas, and Kohinoor Foods surged in the range of 9-15 per cent in trade, beating 0.1 per cent rise in the benchmark Nifty 50 index.

Among individual stocks, shares of L&T Foods advanced 15.3 per cent (Rs 297.95), Chaman Lal Setia rallied 14 per cent (Rs 234.8), KRBL 12.9 per cent (Rs 348.8), Kohinoor Foods 9.7 per cent (Rs 46), and GRM Overseas 9.4 per cent (Rs 226.7). Meanwhile, Adani Wilmar, and Sarveshwar Foods were up 1 per cent and 4 per cent, respectively.

According to reports, Centre may review restrictions placed on exports of certain varieties of rice in September, once the ongoing kharif season concludes and the final production figures are available.

This potential policy change is expected to benefit millers and exporters and support the minimum support price (MSP) scheme. Currently, basmati rice can only be exported above a set floor price, parboiled rice exports are subject to a 20 percent duty, and non-basmati and broken rice exports are completely banned. These measures were implemented to ensure sufficient domestic supplies and stabilise prices.

The government now plans to replace the export ban on non-basmati and broken rice with a fixed export duty, similar to the existing policy for parboiled rice, and lower the minimum export price for basmati rice. This decision follows reports of ample rice stocks in warehouses and optimistic harvest forecasts due to favorable monsoon predictions.

The latest estimates from the agricultural ministry predict this year’s rice production at 136.7 metric tonnes (mt), up from 135 mt last year.

In FY24, India exported 15.7 mt of rice, compared to 21.8 mt in FY23. This included 2.36 mt of non-basmati white rice, 545,000 tonnes of broken rice, and 7.57 mt of parboiled rice. As the world’s second-largest rice producer after China and the largest exporter, India contributed at least 40 percent to global rice trade before the export restrictions were imposed.

Over the past three months, shares of LT Foods, Kohinoor Foods, KRBL, and GRM Overseas have increased by 2-55 per cent, compared to a 7 per cent rise in the Nifty 50 index.