Shares of rice-producing companies surged on April 19 after a report from research firm Fitch Solutions said the global rice market will experience its biggest shortage in 20 years this year.

Global rice production has been falling due to rising temperatures and supply disruptions caused by the Russo-Ukraine war and the coronavirus pandemic over the past few years. The sanctions on Moscow will only worsen things. Rice prices have risen sharply as a result, and according to a recent Fitch Solutions Country Risk and Industry Research report, rice prices are likely to remain near current highs through 2024.

As India is the largest rice exporter, expectations of a prolonged period of high prices have boosted confidence among domestic rice producers. As a result, shares of KRBL, LT Foods, and Kohinoor Foods were sharply higher today.

Shares of KRBL were up 8.29% at Rs 371.60 at 12:24 pm on the National Stock Exchange, while LT Foods was up 4.92% at Rs 103.40. Shares of Kohinoor Foods were trading at Rs 30.80 on the NSE, up 4.94% from the previous close.

In September last year, India implemented measures to control rice prices in the domestic market amid fears that below-average monsoon rains in key growing states would lead to lower production. These measures include banning the export of broken rice and imposing export duties on other grades of rice.

Despite these constraints, India still managed to export record 22.26 million tonnes of rice in 2022, an annual growth rate of 3.5%. This figure exceeds the combined total of the other four major rice exporters: Thailand, Vietnam, Pakistan and the United States.