Trump’s tariff talks spook Indian rice companies:Rice stocks plunge; LT Foods takes biggest hit, share prices fall 3.66%; GRM Overseas slide 1.77%; will rice become cheaper in India?

Shares of Indian companies that export rice fell quickly after the US President Donald Trump suggested he might impose additional 25% tariffs on imported agricultural products, including rice from India. Which Companies Were Affected? The companies that saw their stock prices drop include LT Foods, GRM Overseas, etc. LT Foods, in particular, experienced a significant fall. Why the Worry? Trump’s Warning: The market reacted to comments Trump made about using tariffs to protect American farmers. This created uncertainty and made investors nervous about the future of Indian rice exports to the US. Protecting US Farmers: Trump’s statement came during a meeting where the US government announced financial assistance for American farmers. The concern was that cheap rice imports from countries like India were hurting local farmers in the US. How Big is the Impact, Really? Small Share of US Market: While the news caused a stir, it’s important to note that India’s rice exports to the U.S. are relatively small. They make up less than 5% of all rice imported by the U.S. Basmati Rice Focus: Most of the rice India sends to the U.S. is Basmati rice, a premium variety. Bigger Markets Elsewhere: India exports much larger quantities of rice to countries in the Middle East (like Saudi Arabia and the UAE) and Africa (like Benin and Nigeria). These are the main markets for Indian rice. Prasenjit Paul, Equity Research Analyst at Paul Asset Fund Manager of 129 Wealth Fund, says: The sharp correction in food and agri-export stocks today reflects a typical market response to policy uncertainty. News of a potential US tariff on imported rice has immediately triggered concerns about export volumes, pricing pressure and possible supply-chain disruptions. Will rice become cheaper in India? Trump’s warning about tariffs caused a temporary scare for Indian rice exporters. However, the actual impact might be limited because India’s rice exports to the US are not that large compared to its exports to other parts of the world. And this is the very reason why the kharif crop prices are not likely to fall solely because of Trump’s additional 25% tariffs imposition indication. Instead of selling domestically the portion of the kharif crop meant to be exported to America, the exporters may divert the shipment to other countries with comparatively reduced import duties which may not lead to excess domestic supply and subsequent price drop. ​