 "Rice scrips gain as China opens market")
Shares of rice companies, led by Kohinoor Foods, surged on Wednesday, after estimates of a sharp increase in basmati export this year from the opening of Chinese markets.
The share price of Kohinoor jumped 14.6 per cent to Rs 72.85; that of Chamanlal Setia rose by 6.1 per cent to Rs 74.2. Leading branded basmati producer LT Foods rose 2.6 per cent to Rs 282.3. Non-basmati producer Usher Agro saw a 4.7 per cent jump to Rs 13.3.
“We would send our team soon to discuss the possibility of rice importers in China. If possible, we would appoint local distributors there,” said Gurnam Arora, joint managing director at Kohinoor Foods.
According to sources, other exporters have already initiated the process to start export to China. On November 30, China had agreed to import basmati from 14 Indian companies. These include LT Foods, KRBL (India Gate brand) and Kohinoor. Currently, a small quantity of basmati is shipped to China through Hong Kong.
A recent report from ratings agency ICRA said the opening of China as a destination was a welcome development for basmati traders, recovering from muted demand in the international market and a sizable fall in prices in the recent past.
In 2016-17, basmati export value is expected to remain in line with the previous year but is expected to grow 10 per cent to Rs 25,500 crore in FY18. “In the ongoing harvesting season, the basmati volume is expected to be lower than last year. With a new market, this could push up the realisations next year. Further, depending on the demand, farmers might increase sowing in the FY18 season,” said Deepak Jotwani, assistant vice-president, ICRA.