Global Rice News

India Signs Contracts to Export 500,000 Metric Tons of Basmati Rice

India has recently signed contracts to export approximately 500,000 metric tons of new season basmati rice, taking advantage of the strong demand from key buyers in Europe and the Middle East. Basmati rice, a premium long-grain variety renowned for its aroma, is a popular export for India, with annual exports exceeding 4 million tons. Major buyers include Iran, Iraq, Yemen, Saudi Arabia, the United Arab Emirates, and the United States.

Europe represents another significant market for Indian basmati rice. In an effort to stabilize domestic prices, India had imposed a ban on exports of non-basmati white rice in June. Subsequently, the country established a minimum export price (MEP) of $1,200 per ton for basmati rice in August. However, this floor price had a negative impact on exports of the premium rice variety and left farmers with large stocks of new-season rice. Consequently, the Indian government reduced the floor price to $950 per ton last month.

The decrease in the floor price has revived the basmati rice trade, which had come to a halt after the August decision. Exporters have already signed deals for around 500,000 tons of basmati rice from India’s new crop. Premier Garg, President of the Indian Rice Exporters Federation, explained that the MEP of $1,200 per metric ton made it challenging to secure export contracts. However, with the new lower floor price, traders have been able to sign deals ranging from $1,000 to $1,500 per metric ton.

Turkey, Iraq, and Saudi Arabia have been the top buyers of Indian basmati rice so far this year. Despite the lower MEP of $950 per metric ton, Garg remains confident that India will be able to export its usual annual volume of approximately 4 million metric tons. This positive outlook indicates a promising future for India’s basmati rice industry.

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