Basmati rice stocks like GRM Overseas, Sarweshwar Foods, and Kohinoor Foods fell nearly 3.5% on Monday, January 12, after exports of basmati rice to Iran were hit with uncertainty.
Kohinoor Foods’ share price was the biggest laggard among the pack, as it cracked 3.37% to ₹24.91 apiece. Sarveshwar Foods and GRM Overseas shares plunged over 2% each.
Other basmati rice exporting stocks, LT Foods and KRBL, were also down up to 1.3% in trade today.
What’s behind the fall?
Exports of premium basmati rice to Iran are facing renewed uncertainty, impacting farmers and processors in Punjab and Haryana.
The setback comes after a steep depreciation in the Iranian currency following stricter US sanctions. As the rial hit a fresh low against the US dollar, the Iranian government withdrew subsidies on food imports, leading Indian exporters to suspend shipments. According to media reports, shipments worth around ₹2,000 crore are now stranded at international ports, awaiting clearance for export to Iran.
Iran ranks as the second-largest importer of Indian basmati rice after Saudi Arabia, with a strong preference for the sela (parboiled) variety. The country imports nearly 12 lakh tonnes each year, amounting to an estimated value of around ₹12,000 crore.
Before the Iran–Israel conflict, the exchange rate was roughly 90,000 rial per US dollar. Since then, the currency has depreciated to about 150,000 rial per dollar, sharply increasing the cost of imports for Iran. Previously, the country provided a subsidised exchange rate of 28,500 rial per dollar for food imports, but this concession has now been discontinued.
Last month, US President Donald Trump had signalled fresh tariffs on India’s rice exports to the US, dampening investor sentiment.
“Indian basmati exporters are contending with a dual headwind: the prospect of US trade tariffs threatening core export volumes, and weakening demand from Iran, which is historically one of India’s largest basmati markets, where geopolitical tensions have heightened uncertainty. These developments could exacerbate near-term business risk, potentially compressing margins and weighing on earnings visibility for exporters with significant overseas exposure. Market leaders such as LT Foods (Daawat) and KRBL, whose export revenues comprised ~25–45% of total sales in FY25, are positioned to face the most immediate impact,” said Prashanth Tapse, Research Analyst, Sr VP – Research at Mehta Equities.
Should you buy or sell basmati rice stocks amid US-Iran conflict?
According to Anshul Jain, Head of Research at Lakshmishree, among basmati rice counters, GRM Overseas Limited is showing the strongest price action, displaying clear relative strength versus both the broader market and its sector peers like KRBL Limited and LT Foods Limited.
“GRM Overseas is currently trading near its IPO base neckline around 167, a base that has spanned nearly 175 weeks, reflecting long-term accumulation. Over the past two weeks, the price has compressed inside a mother bar, forming a tight mini coil, a classic volatility contraction setup. This structure signals stored energy rather than distribution. A decisive breakout above 175, backed by volume expansion, would confirm momentum release and open an initial upside trajectory toward the 225 zone. Risk remains well defined while price holds within the coil, with failed breakouts being the key invalidation,” Jain said.
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
