Export tax hits Basmati rice exporters

A total of four basmati rice exporters declined 2.73% and 6.76% after the Union government imposed an export tax of Rs 8,000 per tonne on basmati rice to arrest soaring inflation fuelled by rise in food prices.

Satnam Overseas (down 6.76% to Rs 94.50), KRBL (down 5% to Rs 131.85), REI Agro (down 2.73% to Rs 1525), and Lakshmi Energy and Foods (down 5.74% to Rs 206.05), declined.

Satnam Overseas saw volumes of 20,904 shares, KRBL clocked volumes of 3914 shares, REI Agro counter witnessed volumes of 1320 shares and 765 shares were traded on the Lakshmi Energy and Foods counter on BSE.

Simultaneously, the government also decided to lower the minimum export price (MEP) of basmati from $1200 a tonne to $1000 a tonne. The levy of export tax on basmati rice will discourage export of the commodity and check the surging prices.

On Tuesday, 29 April 2008, shares of basmati rice exports settled mixed when the news of export duty hit the market during trading hours. Satnam Overseas (down 5% to Rs 101.35) and KRBL (down 5% to Rs 138.75), fell. However REI Agro (up 2.23% to Rs 1567.75), and Lakshmi Energy and Foods (up 3.20% to Rs 218.60), rose.

Latest official figures based on provisional statistics showed that India’s basmati rice export rose 31% to Rs 3,240 crore during the first eleven months of the current fiscal over corresponding period of 2006-07.

Global rice prices have more than doubled on fears of tight supplies after leading producers, including India and Vietnam, restricted exports.

Middle East is a major market for Indian basmati rice.