Rice stocks: Rice stocks have fluctuated as tensions in the Middle East raise fears of shipment disruptions, while stocks have also risen in an attempt to recover.
Fluctuations in rice stocks
Rice stocks: On Friday, March 6, the last trading day of the week, rice stocks were in focus on the stock market. These included companies like LT Foods Ltd and KRBL Ltd. Rice exports have been impacted by the Iran-Israel war and tensions in the Middle East. Following shipment disruptions, premium basmati prices fell by 7-10 percent in just 72 hours.
However, following a recent recovery, shares of LT Foods Ltd. jumped 9.5%. KRBL Ltd. also rose 3.3% in early trading. However, prices then fell 1.31% to 1.31%. Overall, rice stocks remained volatile.
Exporters in trouble
Significantly, nearly 2,000 containers are stranded at the Mundra Port in Gujarat due to escalating tensions in the Middle East. Most of these containers are rice. Additionally, more than 300 containers containing frozen food and other perishable items are also stranded at the Jawaharlal Nehru Port Trust. These containers reportedly contain grapes, onions, fruits, and vegetables.
The Middle East is a large and important market for Indian rice exporters. In the 2025 financial year, India exported approximately 6 million tons of basmati rice there. Rice is then exported from India to Saudi Arabia, Iran, Iraq, Yemen, Jordan, Qatar, and Oman, accounting for approximately 80 percent of India's basmati rice exports to the Gulf countries. Significantly, Iran alone accounts for approximately 35 percent of total basmati exports.
Satish Goyal, president of the All India Rice Exporters Association, told Reuters that about 400,000 tonnes of basmati rice is currently stuck at ports or in transit as exporters are facing difficulties in sending shipments.
Why are stocks in focus?
- Four lakh tonnes of rice exported to Gulf countries is stuck mid-transit, causing prices to fall by 6-10 percent.
- Investor confidence has strengthened amid the Indian government's decision to ease restrictions on the export of both basmati and non-basmati rice and its positive stance on floor prices. It should be noted that the government has set a floor price to control domestic rice prices. No exporter can sell rice below that fixed price. The government has removed the floor price of $490 per tonne for non-basmati white rice and $950 per tonne for basmati rice.
- One of the major reasons for stocks like LT Foods Ltd and KRBL Ltd reaching support levels is the buying by investors like Mukul Agarwal.
- Despite shipment delays, there has been no decrease in rice demand from Gulf countries. With demand remaining stable, traders are hopeful that the stuck stock will be cleared as tensions ease.
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