india basmati rice exports forecast to stay stagnant in FY25, according to KRBL chief financial officer
Published on: June 26, 2024.
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India’s basmati rice exports in the 2025 fiscal year are projected to either remain at 5.2 million tonnes, the same as the previous year, or experience a slight increase, according to Ashish Jain, CFO of KRBL Ltd, a leading exporter of premium rice in India. Jain believes that achieving over 15% growth for two consecutive years is unlikely. He stated that exports should remain at the current levels or show marginal growth in FY25. Jain’s comments were made to Business Standard.
While the demand for removing the Minimum Export Price (MEP) of $950 per tonne does not directly affect KRBL, Jain emphasized the need to reassess the floor price to ensure that Indian basmati rice does not lose out to its closest competitor, Pakistan. KRBL primarily sells packaged basmati rice in the domestic and export markets under its flagship brand, ‘India Gate.’ Out of the 9 million tonnes of basmati rice produced annually in India, approximately 2.5 million tonnes are sold domestically, with approximately 0.6 million tonnes being branded basmati rice. KRBL currently holds a 35% share of the domestic branded basmati rice market.
Jain noted that there is a growing demand for branded basmati rice in India, driven by a shift from non-branded to branded packaged rice, especially in the wake of the COVID-19 pandemic. The company reported an 18% growth in its domestic business in the last financial year. Furthermore, Jain mentioned that basmati rice prices have declined by 10-15% since January 2024 due to factors such as higher production compared to the previous year and changes in policies or prices in importing countries.
Addressing the recent controversy surrounding the Geographical Indication (GI) tagging of Indian basmati rice versus Pakistan in the European Union, Jain stated that such issues do not have a short-term impact on the branding of Indian basmati rice.
As part of KRBL’s strategy, the company aims to expand the distribution of branded basmati rice across India and increase its presence in over one million outlets. Currently, they are present in less than 400,000 outlets out of a total of 700,000. Jain also shared the company’s growth strategies, which include facilitating the transition to packaged rice for consumers, expanding basmati rice distribution, and introducing new products. While he did not provide specific revenue and profit guidance for FY25, Jain expressed optimism for double-digit year-on-year revenue growth based on sustained growth in the domestic market and increased exports. In FY24, KRBL’s total income was around Rs 5481.35 crore compared to Rs 5457.24 crore in the previous fiscal year.
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