Basmati Boom: Removal of Export Price Cap Sparks Market Surge

Rice stocks saw significant gains on Monday after the government removed the USD 950 per tonne minimum export price on basmati rice. The move is expected to boost exports and farmers' incomes, with companies like Kohinoor Foods and LT Foods experiencing notable stock surges.

Rice stocks experienced a substantial rise on Monday following the government's decision to remove the USD 950 per tonne minimum export price (MEP) on basmati rice.

Kohinoor Foods' shares skyrocketed by 20 per cent, with LT Foods climbing 9.72 per cent, KRBL rising 7.67 per cent, and Chaman Lal Setia Exports increasing by 5.92 per cent on the BSE market.

The announcement, made on Friday, is aimed at boosting exports and increasing farmers' income, according to Commerce and Industry Minister Piyush Goyal.

''It has been decided to remove the current minimum export price (MEP) of USD 950 MT for issuing Registration-cum-Allocation Certificates (RCAC) for the export of basmati rice,'' said a communication from the Department of Commerce.

The Agricultural and Processed Food Products Export Development Authority (APEDA) was directed to take immediate action to implement the decision while closely monitoring export contracts for any unrealistic prices for basmati exports.

India's total exports of basmati rice in 2022-23 stood at USD 4.8 billion in value, translating to a volume of 45.6 lakh tonnes.

(With inputs from agencies.)