Indian Rice Exporters Federation (IREF) issued an advisory to its members, cautioning them against entering fresh cost, insurance and freight (CIF) commitments for Iran and parts of the Gulf as worries around disruption near the Strait of Hormuz rise.
Developments in Iran and the UAE can have an immediate impact on bunker (ship fuel) prices, and a rise in oil prices may also disrupt container and bulk vessel availability, said Dev Garg, VP of IREF. “Container and bulk freight could increase sharply at short notice, exposing exporters to losses on fixed delivered-price contracts. The situation may also lead to steep increases in insurance premiums,” he added.
Iran is India’s second-largest basmati rice market after Saudi Arabia, and India exported around 1 million tonnes of the aromatic grain to Iran during FY25. India exported nearly 6 million tonnes of basmati rice during 2024-2025, with demand primarily being driven by the Middle East and West Asian markets.
Also read: L&T shares crash over 7% as US–Israel strike on Iran raises Mideast exposure risks
Live Events
Indian rice stocks factor in uncertainties
LT Foods, known for its brands like Daawat, saw its share price plunge nearly 11% to Rs 360 apiece. The company had said in February that the Middle East contributed 9% of its overall revenue mix between April and December (FY26).
KRBL, known for its India Gate brand of basmati rice, and AWL Agri Business, which owns the ‘Fortune’ brand, saw their shares decline around 5% each. GRM Overseas shares fell over 3%.
“Some impact of the conflict on the trade has already started,” Sushil Kumar Jain, Rice Exporters Association’s state unit president, told PTI on Sunday. “These shipments will remain stuck till the situation improves, and it will impact the market. Payments may also get delayed,” he said.
Also Read | Explained: What US-Israel war on Iran means for Indian stock market investors, crude oil and exports
What lies ahead?
IREF expects heightened price volatility in the near term, after basmati wholesale prices rose 10-15% over the past month. Notably, there is no official confirmation yet on whether the Hormuz Strait is closed, obstructing oil transport through the strait.
The fall in the shares of rice exporters comes amid broader market weakness, with Sensex and Nifty declining around 2% each.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)