Shares of rice millers were among the biggest gainers on September 13 amid a surge in prices and chaos in the international rice market after India banned the export of the cereal.
Recently the government banned the export of broken rice and imposed a 20 percent duty on exports of non-basmati rice amid fears of a continuing rise in retail prices of the cereal.
Prices have gone up on expectations of lower output of the kharif crop due to uneven distribution of the southwestern monsoon that has affected sowing.
Large parts of rice-producing Uttar Pradesh, Bihar and West Bengal got less rain, resulting in lower sowing.
According to reports, retail prices of many rice varieties have jumped as much as 40 percent within a month.
India is the largest exporter of rice, accounting for 40 percent of global shipments, and the ban has resulted in rise in international prices as well.
“More restrictions are likely if local rice prices remain high. The ban will push up global rice prices,” Nomura said in note last week.
Explained: Why were curbs placed on rice exports?
Investors expect higher revenue on every kilo of rice sold and shares of KRBL and LT Foods that sell rice under India Gate and Dawat brands, respectively, have seen a lot of buying in recent days.
At 2 pm, LT Food was up over 9 percent at Rs 100, while KRBL gained 13 percent to Rs 365.60 on BSE .
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