Rice stocks rise 14.5% on reports India plans to ease rice export limits

Shares of Chaman Lal Setia Exports, KRBL and LT Foods jumped as much as 13% in early trade on Tuesday following reports that India, the world’s top rice exporter, is considering easing restrictions on rice exports.

In response to these developments, LT Foods shares rose 14.5% in early trading, hitting a new 52-week high. ₹296 each, while KRBL saw a 13% increase ₹348.70. Similarly, shares of Chaman Lal Setia Exports rose nearly 9% to ₹223 each during the session.

India, the world’s top rice exporter, may ease export restrictions on some varieties to avoid a glut in the country before the new crop hits the market in October, Bloomberg reported, citing people familiar with the matter.

“The government is considering allowing shipments of white rice with a fixed duty,” the people, who spoke on condition of anonymity because the discussions are confidential, told Bloomberg. “Authorities could also remove a 20% tax on parboiled rice exports and instead impose a fixed duty to discourage under-invoicing of shipments,” the people said.

Such a move could help cool benchmark Asian rice prices, which hit their highest level in more than 15 years in January after India decided to start restricting sales of key varieties in 2023. “This would be welcome news for some countries in West Africa and the Middle East that rely on the South Asian nation for most of their staple food needs,” the report said.

A spokesperson representing the food and commerce ministries did not immediately respond to requests for comment.

India’s total rice exports fell 21% from a year earlier to 2.9 million tonnes in the first two months of the fiscal year that began April 1, according to government data. Non-basmati rice shipments saw a sharper decline, falling 32% to 1.93 million tonnes in the same period.

Indian farmers are currently planting their main rice crop, which coincides with the onset of the monsoon. Planting activities are expected to peak in July, with harvesting scheduled from late September.

As of July 8, the area under rice cultivation stood at 6 million hectares, up 19 percent from a year earlier, according to the Ministry of Agriculture. The increase follows a recovery in monsoon rains after a period of rainfall deficit last month.

Boosting the rural economy

Despite exit poll expectations, the Bharatiya Janata Party (BJP) performed below expectations in Uttar Pradesh, Maharashtra and West Bengal, states with a large rural and farming voter base.

With less than six months to go to the Maharashtra elections, the government has recognised the urgent need to address rural concerns and has taken significant steps to support the rural economy.

Soon after assuming office, the central government moved quickly to address the gaps observed in states with strong agricultural and rural influence. Initiatives such as the liberation ₹2,000 payments to farmers, financial assistance for construction of 30 million new housing units in rural and urban areas and increase in minimum support price (MSP) for 14 Kharif crops for the 2024-25 season reflect a policy shift aimed at increasing rural spending.

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