Rice exporters' scrips fall on exports ban

Kohinoor Foods and other Indian rice exporters fell in Mumbai after the government banned export of the grain to boost domestic supplies.

India, the world's second-biggest grower of rice, announced the ban as demand for the grain for the government's welfare plans has doubled in the past five years, Finance Minister Palaniappan Chidambaram told reporters yesterday in New Delhi.

Rice exporters including Kohinoor, KRBL, Rei Agro and LT Overseas shipped an estimated 3.6 million tonnes of rice. The ban may reduce the earnings of exporters at a time when rice prices in Chicago have risen 15 per cent in the past six months.

Kohinoor shares fell 55 paise, or 1 per cent, to Rs 51.9 in Bombay Stock Exchange trading. Rei Agro dropped Rs 11.75, or 2.4 per cent, to Rs 488. Reduced shipments from India may help Thailand, Vietnam and Pakistan boost their share of the world rice market. India exports rice to West Asia, West Africa and Sri Lanka. The country also supplies aromatic Basmati rice, grown in the foothills of the Himalayas, to West Asia and Europe.