Rice Stocks Surge As India Mulls Easing Export Limits

Shares of rice milling companies were trading high on Tuesday, with potential relaxation of restrictions on exports of certain varieties of rice, which were imposed by the government in 2023.

The government is now considering lifting restrictions and allowing exports of white rice shipments with a fixed duty, Bloomberg reported citing sources. It is contemplating scrapping the 20% levy on shipments of parboiled rice, the report said.

Stocks of rice exporters surged in trade on Tuesday. LT Foods Ltd. shares hit an intraday high of 14.5%, while KRBL Ltd. shares also surged to 13%. Chaman Lal Setia Exports Ltd. and GRM Overseas Ltd. stock rose as much as 15.3% and 9.4%, respectively.

Impact On Global And Domestic Markets

The export curbs had significantly impacted the global rice supply, driving prices higher, with the benchmark Asian rice prices hitting the highest level in 15 years in January.

India's rice exports fell 21% to 2.9 million tonne in the first two months of fiscal 2025, according to government data. While, shipments of non-basmati rice plummeted by 32% to 1.93 million tonne.

However, the proposed changes could alleviate some of the pressures faced by international rice importers.

The government is reportedly likely to set a floor price of $500 per tonne on non-basmati rice exports. This move aims to ensure that the prices remain competitive while stabilising the domestic market.

Indian Rice Exporters Expand Amid Optimism

LT Foods has reported a robust sales growth of 17% in its Basmati and other specialty rice segments in FY24. The company remains optimistic about achieving double-digit growth in international markets. It plans to invest approximately Rs 200 crore next year, focusing on capacity expansion and digital investments, while maintaining a strong market share of 30.1% in India, with 11% growth in offtake volume, it said.

KRBL, a key player in basmati rice exports, underscored the importance of markets such as Iran, Iraq, and Saudi Arabia. Despite maintaining a steady 6% market share in the US, the company aims to revitalise export growth after a 30% decline in FY24, while sustaining its domestic growth trajectory.

Chaman Lal Setia Exports reported a 4% growth in export volumes to 1.3 lakh metric tons, excluding China, with expanding footprints across Asia Pacific, Middle East, Africa, Americas, and Europe. Engaging in discussions with the UK food regulator for trade agreements to bolster European business prospects, the company saw 6% YoY rise in average export realisation. Export sales, contributing approximately 89% to revenues, experienced a slight decline of 1%, while export volumes increased by 4%.