Rice stocks soar as minimum export price on Basmati scrapped
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Shares in rice exporting firms soared on the back of a government decision to scrap the minimum export price (MEP) on Basmati rice. The move will improve the price competitiveness of Indian firms in overseas markets.
Kohinoor Foods was up 11.4 per cent to Rs 31.30, while REI Agro jumped 9.5 per cent to Rs 10.95 on the BSE. KRBL and Chaman Lal Setia gained 8-9 per cent in a flat Mumbai market. LT Foods traded with over 7.5 per cent gains at Rs 43.
Earlier this year, the government had lowered MEP on basmati rice to $700 a tonne from $900 a tonne to make it more competitive in the global market. Exporters said they are selling basmati rice at an average price of $950 a tonne in the overseas market.
The aromatic rice will be treated on par with non-basmati rice, which is currently been exported in the range of $375-400 a tonne, exporters said.
The country has shipped 4.25 million tonnes of non-basmati rice since the export ban on the commodity was lifted in September, 2011, according to the industry data. At present, there is no MEP fixed on non-basmati rice. India ships the premium aromatic rice variety to Gulf countries, including Saudi Arabia, Iran, Kuwait and Yemen.
Total basmati rice exports stood at 2.4 million tonnes in the 2011-12 fiscal, according to industry data.
India, the world's second biggest producer of rice, had harvested 103.41 million tonnes in the 2011-12 crop year (July-June).
(With PTI inputs)