KRBL, LT Foods shares fall up to 6% after US President Donald Trump threatens fresh rice tariffs

US President Donald Trump has signaled that he could impose fresh tariffs on agricultural products, including Canadian fertilizer and Indian Rice.

Speaking to reporters at the White House on Monday, where he announced a $12 billion package for US farmers, Trump said that some farmers have told him that cheaper imports are making it difficult for their products to compete in the market place.

Farmers, according to Trump, have blamed the alleged dumping of Indian rice in to the US for the falling rice prices. The dumping, as per the farmers, also comes from Vietnam and Thailand.

“They shouldn’t be dumping,” Trump said. “I mean, I heard that, I heard that from others. You can’t do that.” The President went on to add that he would "take care" of the alleged dumping, without specifying the steps he would take.

Trump's remarks have resulted in shares of KRBL and LT Foods decline up to 6% in early trading on Tuesday.

In its latest earnings call, the management of KRBL had said that the current duty on rice exports stand at 50%, they expect the ongoing dialogue between the two governments to lead to a new settlement.

"Having said that, KRBL's direct exposure to the US remains limited, and therefore, the financial impact on our business will be minimal," the management had stated.

On the other hand, LT Foods in its earnings call had stated that North America accounts for 46% of its overall topline and continues to remain a key growth driver with a 47% growth from the same quarter last year. Their flagship brand has a 61% share in the Basmati Rice import market in the US, while Golden Star is the number one Jasmine Rice brand in the region.

Trump's remarks come just before a delegation from the office of the US trade representative, led by Deputy US Trade Representative Ambassador Rick Switzer arrives in India for talks on the tariff issue, which will take place on December 10 and 11, according to official sources.

The current tariff rate on Indian exports to the US is at 50%.

Trump also said that he could target fertilizer imported from Canada, to boost domestic production, which may add to concerns of the farmers, as Canada is the biggest supplier of Potash to the US.

Shares of KRBL are down up to 2% on Tuesday, with the company not having a significant exposure, while LT Foods, which gets nearly 46% revenue from North America is down over 6%.