Global Rice News

India’s Basmati Rice Exports Set to Fall as Pakistan Offers Competitive Prices

India’s basmati rice exports are expected to decline in 2024 after reaching a near-record high last year, as Pakistan emerges as a tough competitor in the market. Pakistani rice suppliers are offering the grain at competitive prices, leading to a rebound in production. Both India and Pakistan are major exporters of the premium long-grain variety of rice, which is well known for its aroma. Their exports primarily go to countries like Iran, Iraq, Yemen, Saudi Arabia, the United Arab Emirates, and the United States.

In 2023, India’s basmati rice exports increased by 11.5% compared to the previous year, reaching 4.9 million metric tons, just shy of the record high of 5 million tons achieved in 2020. The growth in exports was mainly attributed to lower supplies from Pakistan and stocking efforts by importing countries. As a result, India’s record-breaking basmati rice exports contributed to a revenue of $5.4 billion, a 21% increase from the previous year.

However, this year, Pakistan is offering basmati rice at lower prices due to increased production, making it more attractive to buyers. Vijay Setia, a leading exporter from India’s Haryana state, explained, “Last year, buyers rushed to stock up when Pakistan was facing production issues. This year, however, Pakistan offers lower prices than India due to increased production.”

According to Chela Ram Kewlani, chairman of the Rice Exporters Association of Pakistan, Pakistan’s total rice exports may reach 5 million tons in the 2023/24 financial year, up from last year’s 3.7 million tons. The depreciation of the Pakistani rupee has made Pakistan’s exports more competitive.

On the other hand, lower export demand, coupled with an estimated 10% rise in India’s basmati rice production, has caused basmati prices in India to decline. This decline has affected India’s exports, especially to Iran, its largest buyer, which reduced purchases by 36% in 2023. However, higher shipments to Iraq, Oman, Qatar, and Saudi Arabia helped offset this decline.

Furthermore, India’s basmati rice exports faced some challenges in 2023. In September and October, the government imposed a minimum export price (MEP) on basmati rice, which temporarily affected exports. However, exports quickly recovered. In January, exports began to falter again due to increased freight costs caused by disruptions in shipping via the Red Sea.

Exporter Vijay Setia mentioned that buyers are currently holding ample inventory, causing a delay in purchases. He added, “Buyers are holding ample inventory; there’s no need for them to rush.”

In conclusion, India’s basmati rice exports are likely to decline in the coming year due to stiff competition from Pakistan, which is offering the grain at lower prices. However, despite the challenges, both countries remain key players in the global market for premium long-grain rice.

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