On Monday Morning, the share prices of rice export companies saw a decline after the market opened. The union government has imposed export duty and set limits for rice exports.
The government of India has set a minimum export price(MEP) of $1,200 per ton for basmati rice. Along with that, the government has also imposed 20% duty charges on parboiled rice. This step was taken in order to identify and put a stop on illegal rice export practices. Such action taken by the union government has impacted the stocks in the rice export industry.
Although, it should be noted that these changes are applicable on bulk rice exporters. Any exports which do not maintain the set MEP will be put on hold. Those exports will later be addressed by a Committee appointed by the Chairman of APEDA.
Two such stocks saw a downfall of up to 8% after the government announced these changes.
Chaman Lal Setia Exports Limited
Share prices of Chaman Limited opened in red today. The stock lost 7.5% to reach its intra- day low of Rs. 196.95.
Chaman Lal Setia Exports Limited is a manufacturer and processor of Basmati Rice. It was incorporated back in 1974 and exports basmati rice in good quantity to other countries.
On 28th August 2023 after the government announcement, CLSEL issues a press release where it informs BSE, its investors and general public that the said limit has no impact on company’s exports. It mentions that the company mostly exports premium rice which has a higher price than the set minimum price.
KRBL Limited
Share prices of KRBL opened at Rs. 389.95 levels. The stock lost nearly 4% to reach its intra- day low at Rs. 389.
KRBL Limited is one of the largest rice miller in the world. It is a rice process and exporting company and also markets their product. The company has a market share of 32.5% in general trade and 41.9% in market trade.
The company issued a press release shortly after the government announcement. The submitted report to BSE clarifies that the set limit will significantly not impact the export activities of the company given KRBL is more focused on exports of premium rice which exceeds the MEP altogether.
Written by Bhumika Khandelwal
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