Indian rice stocks crash 10% today: What's the reason?
What's the story
Shares of major basmati rice exporters in India have taken a hit following US President Donald Trump's threat to impose tariffs on Indian rice. The move is aimed at protecting American farmers from what Trump termed as "dumping" of cheap Indian rice into the US market. The announcement was made during a White House roundtable on farm aid, where Trump also promised to "take care" of this issue.
Market reaction
Impact on India's rice export sector
The threat of new tariffs has sent shockwaves through India's rice export sector, particularly affecting basmati producers. Kohinoor Foods' shares plummeted 10% to a 52-week low, while LT Foods and KRBL also witnessed losses of up to 6.5%. The US is a small but symbolic market for India's $10 billion rice export industry, accounting for less than 5% of basmati exports.
Trade tensions
Trump's stance amid stalled trade talks
Trump's comments come as trade talks remain stalled and a $12 billion US farmer bailout is in place. The US President had previously imposed a 50% tariff on Indian goods, which could now extend to rice. This development comes as India, the world's largest rice exporter with a global share of 30.3%, faces increased barriers from Washington prioritizing its farm lobby.
Tariff questions
Trump's inquiry about India's rice dumping
During the White House event, Trump questioned Treasury Secretary Scott Bessent about India's alleged rice dumping. He asked why India was allowed to do this and if they had an exemption on rice. Responding to complaints from Louisiana rice miller Meryl Kennedy about imports from India, Thailand, and Vietnam affecting US prices, Trump said, "They shouldn't be dumping... We'll take care of it. It's so easy."