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A fresh salvo from US President Donald Trump has sent shockwaves through India's rice export sector, hammering shares of key basmati players on Tuesday. Speaking at a White House roundtable on farm aid, Trump vowed to "take care" of alleged "dumping" of cheap Indian rice into the US market, hinting at new tariffs to shield American growers.

The rhetoric, coming amid stalled trade talks and a $12 billion US farmer bailout, triggered a swift selloff, with Kohinoor Foods tumbling 10% intraday to a 52-week low.

As of 1:42 p.m. IST, Kohinoor Foods (BSE: KOHINOOR) was trading at Rs 27.81, up marginally from its session low of Rs 24.41 but still down 2.5% from Monday's close of Rs 27.62.

The 9.9% intraday drop wiped out Rs 10 crore in market cap for the small-cap exporter, pushing its valuation to a mere Rs 101 crore. Peers like LT Foods and KRBL followed suit, shedding up to 6.5% before partial recoveries.

This isn't isolated turbulence — it's a flare-up in a brewing trade war. India, the world's top rice exporter with a 30.3% global share (2.34 lakh tonnes to the US in FY24), now faces escalating barriers as Washington prioritizes its farm lobby ahead of midterms.

Trump's comments echo August's 50% blanket tariff on Indian goods (25% base + 25% punitive for Russian oil buys), now potentially extending to rice — exempt so far.

The Trigger: Trump’s “Dumping” Jab at a Critical Juncture

During Monday's event, Trump grilled Treasury Secretary Scott Bessent:

"Why is India allowed to do that [dumping rice]? They have to pay tariffs. Do they have an exemption on rice?"

Responding to Louisiana rice miller Meryl Kennedy’s complaints about imports from India, Thailand, and Vietnam eroding US prices, Trump declared:

"They shouldn’t be dumping... We'll take care of it. It's so easy."

The timing adds pressure: A US delegation, led by Deputy USTR Rick Switzer, arrives in New Delhi on December 10–11 for Bilateral Trade Agreement (BTA) talks. Hopes for tariff rollbacks are dim, with experts pegging success as “low.”

Trump also eyed Canadian fertilizer duties (up to 45% outside USMCA), signaling a broader agricultural protectionist push.

For India’s $10 billion rice export industry, the US is a niche but symbolic market — less than 5% of basmati, dominated by West Asia. Yet any new tariff could cascade into higher costs, diverted shipments to price-sensitive regions, and squeezed margins amid a global glut.

Market Meltdown: Rice Stocks’ Bloody Tuesday

Table converted into clean list — intraday carnage (as of 1:40 p.m. IST):

Kohinoor Foods

• Current Price: Rs 27.81
• Intraday Low: Rs 24.41
• % Change (Intraday): -9.9%
• Market Cap: Rs 101 crore
• 52-Week Range: Rs 26.61– Rs 55.30

LT Foods

• Current Price: Rs 376.00
• Intraday Low: Rs 368.00
• % Change (Intraday): -6.5%
• Market Cap: Rs 6,200 crore (est.)
• 52-Week Range: Rs 290– Rs 518

KRBL

• Current Price: Rs 375.65
• Intraday Low: Rs 370.05
• % Change (Intraday): -2.7%
• Market Cap: Rs 9,800 crore (est.)
• 52-Week Range: Rs 300– Rs 450

Chaman Lal Setia

• Current Price: Rs 242.50
• Intraday Low: Rs 243.05
• % Change (Intraday): -4.5%
• Market Cap: Rs 1,325 crore
• 52-Week Range: Rs 200– Rs 447

Volumes surged 3–5x the daily average: Kohinoor traded 63,516 shares (vs. 20k norm), LT Foods 2.5 lakh. Partial rebounds hint at bargain buying, but sentiment stays fragile, with RSI oversold across the pack.

Broader Ripples: From Farms to Fiscal Math

India's rice sector employs 100 million+ people and contributes $50 billion to agri-exports.

US tariffs could shave 5–10% off basmati realizations — already down 15% YoY due to global oversupply — according to industry analysts.

Exporters like LT Foods (Daawat) and KRBL (India Gate), which derive 20–30% of revenue from the US/EU, may be forced to reroute shipments to volatile markets like Iran and Africa.

Government response: Commerce Secretary Rajesh Agarwal leads BTA discussions this week, but experts doubt quick wins given Trump's farm-first political stance.

Domestically, the lifting of minimum export price (MEP) on non-basmati rice offered some relief, but the basmati MEP ($950/tonne) still holds as a stabilizing measure.

Investor Radar: Opportunity in the Dip?

Analysts see tactical accumulation opportunities:

• Kohinoor Foods: Q2 FY26 sales up 106% YoY to Rs 48 crore, despite losses
• LT Foods: EBITDA margins stable at 8–10%
• Consensus view: Hold core holdings; tariff clarity by Q1 2026 could drive 15–20% rebounds

As Trump doubled down — "Tariffs solve it in two minutes" — Dalal Street braces for aftershocks.

For rice exporters, it's a high-stakes harvest: navigate the trade tempest, or watch margins evaporate. With BTA talks opening tomorrow, the global grain game just got grittier.

Source : msn