Shares of major rice exporting companies witnessed strong buying interest on Wednesday, April 8, after the United States, Israel and Iran agreed to a two-week ceasefire. According to reports from Upstox, KRBL shares rose as much as 8.09% to hit an intraday high of ₹336.65 on the National Stock Exchange (NSE), while LT Foods advanced as much as 8% to hit an intraday high of ₹415.50. Kohinoor Foods gained as much as 8.75% to ₹24 and Chaman Lal Setia exports surged as much as 15.6% to touch a high of ₹275. As of 2:13 pm, major rice exporters were outperforming the benchmark NIFTY50 index by rising over 5% each, data from NSE showed.
The ceasefire agreement includes a contentious clause allowing Iran and Oman to charge transit fees on vessels passing through the Strait of Hormuz, the 34-km-wide waterway that handles nearly a fifth of global oil shipments. According to Associated Press reports, Iranian officials said the proposed fees could help fund post-war reconstruction following extensive damage to the country's defence, administrative, and civilian infrastructure during the conflict. The 34-km-wide waterway falls within the territorial boundaries of both countries but has long functioned as an international passage, with no history of tolls being imposed by either side. Any transit fee structure would vary based on vessel type, cargo, and prevailing conditions, with reports suggesting Iran's Deputy Foreign Minister Kazem Gharibabadi is working with Oman on a formal protocol to regulate and facilitate transit rather than hinder it.
The ceasefire agreement has triggered a broad-based rally across global markets, with oil prices experiencing their biggest drop in nearly six years. WTI oil prices plummeted by as much as 19% after President Donald Trump agreed to halt airstrikes on Iran, while Brent crude fell by as much as 16%. The MSCI Asian stock index rose 2.6%, Wall Street index futures gained more than 2%, and European stock futures also rose 5% as investors anticipated lower oil prices would help cool inflation and support economic growth. The US dollar fell 0.6% while US bonds rose as investors increased bets on Federal Reserve interest rate cuts, with the probability of Fed cuts by year-end rising to 60% compared to almost zero earlier in the week.
Iran represents a major market for Indian basmati rice, importing approximately 1 million tonnes in the 2024-25 fiscal year, valued at roughly $698 million to $1.2 billion, according to data compiled by Trading Economics as reported by Upstox. The ceasefire agreement provides much-needed relief to rice exporters which have significant business exposure to Iran. President Donald Trump agreed to the two-week ceasefire less than two hours before his deadline for Tehran to reopen the Strait of Hormuz or face devastating attacks on its civilian infrastructure. The Strait remains a critical artery not only for oil but also for the movement of key commodities such as fertilisers, making its reopening crucial for global supply chains.
Under the United Nations Convention on the Law of the Sea (UNCLOS), coastal states cannot levy charges simply for allowing passage through international straits. Limited fees may be applied for specific services like piloting or towing, but these must be non-discriminatory and not target vessels based on nationality. Gulf nations such as the United Arab Emirates and Qatar have pushed back against the idea, reiterating the need for free and open navigation and cautioning against introducing financial mechanisms tied to passage through the strait at this stage. The disruption had triggered a sharp rise in global oil prices since February 28, when commercial vessels were attacked, making the reopening particularly significant for global energy markets.
According to reports from Reuters, Iran said talks between the US and Iran would begin on Friday in Islamabad, Pakistan, whose prime minister helped mediate the ceasefire. The US has not yet confirmed in-person talks but says they are being discussed. Trump said Iran had presented a 10-point proposal that was a 'workable basis' for negotiations and he expected an agreement to be 'finalized and consummated' during the two-week window. Further negotiations, particularly around the long-term status of the Strait of Hormuz, are expected to continue, with fresh talks involving the US and Israel scheduled to begin in Islamabad on Friday. The deal is subject to Iran's agreement to pause its blockade of oil and gas supplies through the strait, with Iran's Foreign Minister Abbas Araqchi stating Tehran would stop counter-attacks and provide safe passage through the strait.
