Rice stocks trade mixed after govt imposes curbs on exports
Shares of rice exporters were trading mixed in morning trade on August 28 after the government imposed a 20 percent export duty on parboiled rice, even as the companies said the move will have minimal impact on their operations.
At 10 am, shares of LT Foods were trading 0.42 percent up at Rs 166.70 on the BSE, while KRBL slipped 2.44 percent to Rs 388.35.
The government on August 25 announced a 20 percent export duty on parboiled rice.
The move comes a month after the Centre imposed a ban on the export of widely consumed non-basmati white rice.
According to experts, the curbs are driven by the fears of El Nino as reduced rainfall activity may strain the supplies of the staple grain in the domestic market.
India is one of the significant exporters of parboiled rice, with the total exports in this category of rice amounting to 7.4 million tons in 2022.
Noticing that rice exports of restricted varieties are continuing despite ban, the government on August 27 also introduced additional safeguards.
As per the notification issued by DGFT in this regard, contracts for basmati exports with the value of $1,200 per MT and above will have to be registered for the issue of a Registration – cum – Allocation Certificate (RCAC).
“Contracts with the value of below $1200 per mt may be kept in abeyance and will be evaluated by a committee to be set up by the Chairman, APEDA, for understanding the variation in prices and use of this route for the export of non-Basmati white rice,” it added.
Meanwhile, Ashwani Kumar Arora, MD and CEO of LT Foods, said the curb on basmati rice exports won’t impact the company.
“We export under our brand so curb on basmati rice won’t impact us,” he told CNBC-TV18.
The parboiled rice segment will see some impact, he added.
Associations will have a discussion with the government today regarding rice exports. The overall impact of the export curb will be to the extent of 1.2-1.5 MT, he added.
Akshay Gupta, business head for bulk exports at KRBL, said there is a USD 1,200/tonne minimum export price, which is impacted.
He sees minimal impact of this move on the company as it is in the branded category.
“90 percent of our exports are above the USD 1,200/tonne mark,” he told CNBC-TV18.
This norm is till 15th October, post which supply from the new crop will kick in, he added.
Average export price of basmati rice last year has been in the range of USD 1,050-1,100/tonne. Most of the shipments of this crop season have been made, he said, adding that the impact on the overall industry will be limited.
KRBL is India’s largest exporter of branded basmati rice, while LT Foods is a leading processor of rice and other speciality foods.
Shares of KRBL are down 0.14 percent this year till date, while LT Foods has climbed 47 percent during the same period.
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