Shares of rice companies are trading in the green after media reports surfaced saying that the government is expected to come out with a formal notification to reduce the minimum export price (MEP) of basmati rice to $950 a tonne, as the present MEP levels are impacting shipments.

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CNBC-TV18 had earlier reported that the government is considering a proposal by exporters for a reduction in MEP for basmati rice from $1,200 per tonne.

Sources told CNBC-TV18 that recommendations were made by rice exporters from Punjab, Haryana, and Uttar Pradesh before inter-ministerial committee. Further, the industry had urged govt to reduce MEP for basmati rice to boost export competitiveness

According to the latest media reports, the government has decided to reduce the MEP for basmati rice shipments to $ 950 per tonne from $ 1,200 per tonne fixed on August 25.

Shares of KRBL and LT Foods are up 1.5% while Chaman Lal Setia is up over 1% on BSE on the BSE. Kohinoor Foods shares surged over 5% and are trading at ₹36.

Rice industry stakeholders have been urging the government to lower the MEP for basmati rice to enhance their export competitiveness. They cite recent challenges, where they could not secure orders at global food fairs in Istanbul and Iraq due to the relatively high MEP of $1,200 per quintal.

Consequently, Indian rice exporters lost orders to competitors from Pakistan and Thailand, undermining the nation's position in the international rice market. The proposed reduction in MEP aims to address these concerns and bolster India's standing as a leading exporter of premium basmati rice.

It's expected that this move will not only benefit the rice industry but also ensure that Indian consumers continue to have access to affordable rice options while supporting the country's rice farmers in obtaining competitive prices for their produce

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(Edited by : Amrita)