Rice stocks experienced significant gains on Monday, March 10, 2025, with related stocks surging up to 6.5% on the Bombay Stock Exchange (BSE) following the Indian government's recent decision to permit the export of 100% broken rice. Among the individual stock performers, Chaman Lal Setia led the charge, rising as much as 6.46% to hit an intraday high of Rs 317.90 per share. Other notable gainers included Sarveshwar Foods, which grew by 6.17% reaching Rs 7.74, and L&T Foods, which increased by 3.36% to Rs 362. GRM Overseas was also boosted, trading 2.98% higher at Rs 251.10, followed by KRBL and Kohinoor Foods, which saw gains of 2.54% to Rs 278.20 and 0.33% to Rs 36, respectively.
This uptrend came swiftly after the Indian government issued a notification on March 7, allowing the export of 100% broken rice. This follows a surge in inventories, which hit record levels early this February—nearly nine times greater than the government’s target. The government’s move is seen as beneficial not only for reducing the overflowing stockpiles within the country but also as providing lower-cost rice to poorer African nations and supporting Asian animal feed and ethanol producers dependent on this rice grade.
India had previously banned the export of 100% broken rice on September 2022 and imposed restrictions on the export of other rice grades in 2023, primarily due to concerns about agricultural output resulting from insufficient rainfall. With supply conditions rapidly improving after harvesting what has been reported as a record crop, the Indian government felt confident to lift these constraints, permitting exports once more—now limited primarily to 100% broken rice.
According to B.V. Krishna Rao, president of the Rice Exporters' Association (REA), "Now the broken rice exports are allowed, we anticipate exporting around 2 million tons of this grade in 2025." This marks a shift from the previous restrictions and demonstrates confidence within the industry concerning rice supply and demand dynamics. For perspective, India managed to export approximately 3.9 million metric tons of broken rice back in 2022, with major recipients being countries like China (for animal feed) and several African nations, including Senegal and Djibouti, for human consumption.
Market analysts note the price competitiveness of Indian broken rice. Currently, it is offered at about $330 per metric ton, contrasted with around $300 from rivals such as Vietnam, Myanmar, and Pakistan. Himanshu Agrawal, executive director at Satyam Balajee, stated, "Indian broken rice is currently offered at $330 per metric ton, compared to approximately $300 from rival suppliers like Vietnam, Myanmar, and Pakistan." Agrawal adds, “Competing countries have limited stocks. Therefore, as their supplies dwindle, buyers will naturally switch to India, resulting in improved export figures over the forthcoming months.”
State granaries are reportedly holding 67.6 million tons of rice, including unmilled paddy, as of February 1, 2025. This is soundly above the government’s target of just 7.6 million tons. The higher inventory levels not only offer capacity for export but also help stabilize domestic prices, easing concerns among local consumers and producers alike. The boost to rice exporters stands to benefit various stakeholders within the agricultural sector and highlights the government’s strategic pivot toward facilitating the export market.
The rally observed on Monday suggests heightened investor confidence as rice-related stocks responded positively to the announcement, with the BSE Sensex trading 0.37% higher at 74,605.77 during mid-morning trading. The appreciable movements seen across stocks like GRM Overseas and Chaman Lal Setia indicate not just recovery from prior market dips due to export impositions but the return of optimism among investors aiming to capitalize on renewed supply chains.
A glance back at historical constraints shows the impact of the recent export permissions. The restrictions had hampered potential revenue and supply channels for many exporters and related industries. With the approval granted, the sentiment now echoes the hope for upcoming months where the reduction of surplus stocks will not only stabilize local markets but also reinvigorate international trade deals. Analysts remain cautiously optimistic as they expect favorable conditions to uplift the entire sector.
While the immediate effects on the rice stock market are evident with the recent surge, the broader long-term perspectives will also come under scrutiny. The export capabilities of Indian rice, particularly as the world's largest rice exporter, put it at the heart of strategic agricultural resources globally. The change marks pivotal ground for potential trade routes extending toward both smaller and larger economies.
It remains to be seen how these adjustments will play out over upcoming months as India slowly rolls back on its prior restrictions, but one thing is clear: the rice markets are bouncing back—fueled by export potential and strategic planning. This not only affirms the viability of India’s rice trade but positions it to remain a key player on the global stage.