Chaman Lal Setia Exports hits record high; LT Foods, KRBL also surge as govt approves export of rice to UAE
Rice stocks rally: Chaman Lal Setia Exports hit a record high of Rs 256 on the BSE. KRBL, too, was trading 4.62 per cent higher at Rs 420.90 while LT Foods was trading nearly 4 per cent higher at Rs 169.80 on the BSE
Rice stocks rally: Shares of rice companies rallied on Tuesday, September 26, a day after the Ministry of Commerce & Industry cleared the export of 75,000 tonnes of non-basmati white rice to the United Arab Emirates (UAE) through National Cooperative Exports Ltd (NCEL). The decision is noteworthy because, although there is a ban on rice exports, India is shipping rice to friendly and neighbouring countries on their request to meet their food security demands.
"Export of 75,000 MT of Non-Basmati White Rice (under HS code 1006 30 90) to UAE is permitted through NCEL,” the Directorate General of Foreign Trade (DGFT) said in a notification. READ MORE
Reacting to the development, shares of rice milling and exporting companies surged in trade. For instance, Chaman Lal Setia Exports hit a record high of Rs 256 on the BSE. KRBL, too, was trading 4.62 per cent higher at Rs 420.90 while LT Foods was trading nearly 4 per cent higher at Rs 169.80 on the BSE at the time of filing this report. Kohinoor Foods was also trading over 1 per cent higher at Rs 35.50 on the BSE. Adani Wilmar was also trading 0.75 per cent higher at Rs 342.90 on the BSE.
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The government has also allowed exports of non-basmati rice to Bhutan (79,000 tonnes), Mauritius (14,000 tonnes) and Singapore (50,000 tonnes) through the NCEL. On September 9 last year, the government banned the export of broken rice to check rising retail prices and boost domestic supply. On July 20, it banned exports of non-basmati white rice to boost domestic supply and keep retail prices under check during the upcoming festive season.
Meanwhile, India will cut the floor price for basmati rice exports in the coming days, Reuters reported citing sources familiar with the matter, after millers and traders complained about a sharp drop in overseas sales of the premium aromatic grain. "India will lower the basmati floor price to $850 a metric ton, down from $1,200 a ton, to help millers and traders ship out the rice grade, said the sources, who didn't wish to be identified as they are not authorised to talk to media," said a Reuters report.
Last month, India fixed the floor price, or the minimum export price (MEP), for basmati rice shipments at $1,200 a metric ton. Authorities said the MEP was imposed to help New Delhi ensure that non-basmati rice was not exported as basmati rice.