Is India losing to Pakistan in the basmati rice battle?
Published on: March 2, 2024.
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India’s basmati rice exports are expected to decline this year due to stiff competition from Pakistan. Pakistan, which is the only other global exporter of basmati rice, is offering lower prices due to increased production. This has led to a surge in Pakistan’s rice shipments, which are projected to reach 5 million tonnes in the 2023-24 financial year compared to 3.7 million tonnes last year.
India’s rice output is also likely to decrease for the first time in eight years due to below-average rainfall. The Ministry of Agriculture and Farmers Welfare predicts that rice production will decline to 123.8 million metric tonnes in the current crop year.
India’s basmati rice exports have been a significant source of revenue, with shipments reaching 4.9 million metric tonnes in 2023, an 11.5% increase from the previous year. Despite the Indian government imposing a minimum export price on basmati rice, exports quickly recovered after a temporary decline.
While India’s shipments to Iran, the largest buyer of basmati rice, decreased in 2023, there were higher demands from countries like Iraq, Oman, Qatar, and Saudi Arabia. However, Indian basmati rice exports started shrinking in January and could further decrease due to increased freight costs and disruptions in shipping.
India and Pakistan have long been competitors in the international basmati rice market. India has been protecting Basmati since the late 1990s and has defined specific geographical production zones for the rice variety. Pakistan only recognized its growing regions for Basmati in 2021. The two countries are also at odds over India’s application for a Protected Geographical Indication for Basmati rice in the European Union. The EU’s decision to grant India the PGI status for basmati rice would further escalate the competition between the two nations.
Despite the challenges from Pakistan, India remains a major player in the basmati rice market. While it may face temporary setbacks, experts believe that the competition will continue in a healthy manner.
