Indian rice-exporting stocks came under heavy selling pressure on December 9 after US President Donald Trump signaled the possibility of imposing fresh tariffs on agricultural imports, including Indian rice and Canadian fertilisers. The comments immediately dampened investor sentiment, triggering sharp declines across multiple rice-related counters.
The weakness spread quickly through the sector as traders reacted to the potential impact of new trade barriers on India’s rice export outlook. Several rice-exporting and agri-linked stocks fell between 2.5% and 8%, reflecting rising concern over trade tensions.
LT Foods Falls Nearly 8% After Tariff Warning
Among the most affected stocks was LT Foods, a major rice exporter known for brands such as Daawat. The stock dropped close to 8%, sliding to ₹362.2 per share during the session.
The decline comes despite the company’s assertion that its ‘Royal’ brand remains the top basmati rice brand in North America, highlighting its strong presence in the US market — the same market now facing tariff uncertainty.
With the US being a key destination, investors reacted sharply to any potential disruption in LT Foods’ export flows.
Broader Rice Basket Sees Sharp Declines
The negative sentiment spilled over to other rice stocks as well:
GRM Overseas fell around 6%
KRBL slipped approximately 2.5%
Kaveri Seed Company dropped about 2.5%
AWL Agri Business (formerly Adani Wilmar) declined roughly 2.5%
The intensity of selling reflects the market’s sensitivity to global trade developments, especially when they directly affect India’s agriculture and food-export sectors.
Also Read: PM Modi Breaks Silence on IndiGo Crisis, Says Rules Must Not “Harass Citizens”
What Triggered the Sell-Off: Trump’s Fresh Tariff Threat?
The sharp market reaction followed comments from US President Donald Trump, who indicated that his administration may initiate another round of tariffs targeting agricultural imports. His remarks were made while addressing concerns raised by American farmers, who claim that cheaper foreign goods are hurting domestic producers.
During a White House briefing, Trump announced $12 billion in new assistance for US farmers. Alongside the financial support, he expressed strong criticism of foreign agricultural imports, calling them unfair competition.
Trump said that imported farm products were “putting pressure on local producers” and reiterated that he would act against what he perceives as unfair trade practices.
Regarding India’s rice shipments to the US, he remarked:
“They shouldn’t be dumping. I mean, I heard that, I heard that from others. You can’t do that.”
His comments immediately sparked concern among Indian investors about potential new barriers for rice exporters if tariffs are implemented.
Background Context Mentioned in the Source: Previous Tariff Actions
The report also noted that export-oriented stocks had previously fallen sharply after the Trump administration raised tariffs on Indian imports to 50%, citing India’s continued purchase of Russian oil.
The earlier tariff hikes had already put pressure on multiple export-dependent sectors, and the latest threat raises the possibility of additional measures targeting agricultural goods.
While there has been some support for share prices at times due to rising expectations of an India–US trade deal, the tariff threat has rekindled fears of renewed volatility.
Investor Sentiment Turns Cautious Across Agri-Export Themes
The sell-off on December 9 shows how sensitive the market remains to geopolitical and trade-related developments. For stocks like LT Foods and GRM Overseas, which rely heavily on export income, any indication of higher tariff barriers directly influences valuations.
Similarly, companies like KRBL and Kaveri Seed Company, though diversified, still feel the impact due to broader concerns about agricultural exports and trade flows.
The drop in AWL Agri Business reflects worries around operational challenges in the global agricultural supply chain if tariff tensions escalate.
US Farmer Concerns Drive Political Pressure
Trump’s comments were made while responding to US farmers who argued that cheap agricultural imports were hurting their ability to compete. This domestic pressure has been a recurring theme in US agricultural policy, often resulting in protectionist measures.
The announcement of a $12 billion aid package for US farmers further indicates the political importance of the sector to the administration.
With agricultural imports under scrutiny, the risk of retaliatory or targeted tariffs on Indian products — including rice — now appears higher, at least based on the signals sent through Trump’s remarks.
Market Reaction: Sharp Downside but Path Ahead Uncertain
The immediate reaction in the stock market was clearly negative, but investor focus will now likely shift to:
Whether the US formally announces new tariffs
The scope of products that might be affected
India’s potential response
The status of any ongoing trade discussions
While the report mentions that expectations of a trade deal had provided some temporary support in the past, markets are now reassessing the risk landscape following the latest tariff threats.
Disclaimer
The original report included a disclaimer stating that views and investment tips by experts on Moneycontrol are their own, and users should consult certified professionals before making investment decisions.
Click here to explore:
Gift Nifty
FII DII Data
IPO
