Shares of major rice companies such as Kohinoor Foods Ltd, KRBL, Chaman Lal Setia Exports and GRM Overseas declined between 1% and 8% on Monday, a day after the government imposed an export tax on contracts below the value of $1,200 MT (metric ton). The move has been taken to prevent the possible 'illegal' exports of white non-Basmati rice in the garb of premium quality Basmati rice.

During the trading session on Monday, the share price of GRM Overseas fell 4.82% to ₹182.20. Shares of KRBL Ltd plunged as much as 3.9% to hit an intraday low of ₹383.00 apiece on the BSE. At the time of reporting, the share price of KRBL Ltd was trading 1.78% lower at ₹390.95.

The share price of Kohinoor Ltd, plunged as much as 1.3% to hit an intraday low of ₹35.70. At the time of reporting, shares of the company were trading 0.77% lower at ₹35.90.

Meanwhile, the share price of Chaman Lal Setia Exports Ltd plunged as much as 7.9% to hit an intraday low of ₹196.15 apiece on the BSE. At the time of reporting, shares of Chaman Lal Setia Exports were trading 3.6% lower at ₹205.40.

The share price of Adani Wilmar Ltd, declined as much as 0.83% to hit an intraday low of ₹370.55 apiece on the BSE. At the time of reporting, the share price of the company was trading 0.17% lower at ₹373.

However, the share price of L&T Foods, which manufactures Daawat Basmati Rice was trading 3.8% at ₹172.30.

According to the commerce ministry, the government received reports regarding misclassification and illegal export of non-basmati white rice, the export of which has been prohibited with effect from July 20. "It has been reported that non-basmati white rice is being exported under the HS codes of parboiled rice and Basmati rice," says the ministry.

According to the ministry, APEDA (Agricultural and Processed Food Products Export Development Authority), which is responsible for the regulation of the export of Basmati rice, has a web-based system to keep a check on rice exports. The government has also directed APEDA to hold to rice traders to "sensitize them about the matter."

"Contracts for Basmati exports with the value of $1200 per MT only and above should be registered for the issue of Registration – cum – Allocation Certificate (RCAC)," says the ministry.

"Contracts with the value of below $1200 per MT may be kept in abeyance and may be evaluated by a committee to be set up by the Chairman, APEDA, for understanding the variation in prices and use of this route for the export of non-Basmati white rice. It has been noted that there has been a large variation in the contract price of Basmati being exported with the lowest contract price being $359 Per MT in the backdrop of an average export price of $1,214 per MT during the current month. The committee (APEDA) should submit its report within a period of one month, whereafter a decision on lower price exports of Basmati planned by industry can be taken appropriately," it adds.