Krbl, Lt Foods Shares Rise as India Reduces Floor Price for Basmati Rice Exports
Published on: October 27, 2023.
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Shares of LT Foods and KRBL saw a 3% increase in Friday’s trading session following a government decision to lower the floor price for basmati rice exports. The floor price was reduced from $1,200 per metric tonne to $950 per metric tonne after complaints from farmers and exporters that it was negatively impacting trade by causing shipment delays. This move is expected to restore competitiveness for Indian basmati rice in global markets, according to Atul Garg, managing director at GRM Overseas.
LT Foods and KRBL are two of the largest exporters of basmati rice from India. LT Foods processes and exports rice under the Daawat brand, while KRBL processes and exports rice under the India Gate brand. The reduced floor price is likely to benefit these companies and help them regain lost ground in the export market.
India and Pakistan are the leading exporters of basmati rice, with India exporting over 4 million metric tonnes to countries like Iran, Iraq, Yemen, Saudi Arabia, the United Arab Emirates, and the United States. This year, India is expected to produce more basmati rice than the previous year due to increased cultivation areas by farmers. However, farmers have been struggling to sell their paddy as millers and traders have stopped purchasing in key wholesale markets. The reduction in floor price is expected to incentivize millers and traders to start buying paddy, thereby stabilizing prices.
In addition to lowering the floor price for basmati rice exports, India has also restricted exports of non-basmati rice varieties, making basmati rice a prominent focus for the country’s rice export industry.
Source: [CNBCTV18](https://www.cnbctv18.com)
