Shares of Chaman Lal Setia Exports, KRBL, and LT Foods saw a sharp decline of up to 7% in early trade on Monday following the government's restrictions on basmati rice exports. The government on Sunday said that it would not permit the export of basmati rice below $1,200 ( ₹99,680) per tonne to prevent potential "illegal" shipments of white non-basmati rice in the garb of premium basmati rice.
In response to this, Chaman Lal Setia Exports witnessed a share price drop of 7.4% to ₹196.95, while KRBL's shares fell by 4% to ₹383 apiece, and LT Foods' shares declined by 5% to ₹157.85.
The Ministry of Commerce directed the trade promotion body APEDA to refrain from registering contracts below $1,200 per tonne. Existing contracts below this threshold have been put on hold, PTI reported.
The government has been taking measures to control rice retail prices and boost domestic supply. It previously banned exports of broken rice in September of the previous year and imposed restrictions on non-basmati white rice last month. Recently, a 20% export duty was imposed on par-boiled non-basmati rice. With these measures, India has now implemented restrictions on all types of non-basmati rice, the report noted.
India's rice production is estimated to have risen to 135.54 million tonne in the 2022–23 crop year (July–June) from 129.47 million tonne in the previous year, the report said, citing agriculture ministry data.
India's total exports of basmati rice stood at $4.8 billion in 2022-23 in terms of price, while in volume terms, it was at 45.6 lakh tonne. Exports of non-basmati stood at $6.36 billion in the last fiscal. In volume terms, it was 177.9 lakh tonne. The export of non-basmati white rice was prohibited on July 20.
Parboiled rice exports have grown 21.18% (3.29 MMT during the current year compared to 2.72 MMT in previous year), while the export of basmati rice has increased by 9.35% (1.86 MMT in the current year compared to 1.70 MMT during previous year).
Similarly, the export of non-basmati white rice also registered an increase of 4.36% (1.97 MMT compared to 1.89 MMT in previous year), according to the report.
In a report last week, Reuters said that India is considering implementing a ban on sugar mills from exporting sugar in the upcoming season, starting in October. This action would mark the first time in seven years that shipments are being halted owing to diminished cane yields caused by inadequate rainfall, the report said, citing government sources.
India allowed mills to export only 6.1 million tonnes of sugar during the current season to Sept. 30, after letting them sell a record 11.1 million tonnes last season. In 2016, India imposed a 20% tax on sugar exports to curb overseas sales, according to the report.
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