India’s Basmati Exports Expected to Decline due to Pakistan’s Competitive Pricing
Published on: March 8, 2024.
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India basmati exports to decline as Pakistan offers competitive prices
Pakistan and India are known for their exports of premium long-grain Basmati rice, which is highly sought after for its aromatic qualities. These two countries supply Basmati rice to various nations such as Iran, Iraq, Yemen, Saudi Arabia, the UAE, and the US.
However, it is predicted that India’s basmati rice exports will decrease in 2024. Pakistan is currently offering the grain at competitive prices, leading to a decline in Indian exports. This shift in the market can be attributed to a rebound in production in Pakistan.
In 2023, India experienced an 11.5% increase in exports of basmati rice compared to the previous year. The total export reached 4.9 million metric tons, which was just slightly lower than the record high of 5 million tons achieved in 2020. This increase was driven by a decrease in supplies from Pakistan and the efforts of importing countries to stock up on basmati rice.
India, being the largest rice exporter globally, earned a record $5.4 billion in 2023 due to higher prices, as reported by government data. However, this trend is expected to shift in 2024 due to the competitive prices offered by Pakistan. Buyers are now turning to Pakistan for their rice purchases as the country has increased its production and is able to offer lower prices compared to India.
According to Vijay Setia, a leading exporter based in the state of Haryana in northern India, last year buyers were rushing to stock up on rice due to production issues in Pakistan. However, this year, the increased production in Pakistan has allowed the country to offer lower prices, leading to a shift in demand.
The depreciation of the Pakistani rupee has also played a role in making their rice exports more competitive, as stated by Akshay Gupta, the head of bulk exports at KRBL Ltd. On the other hand, India has seen a slight increase in basmati rice production, which has resulted in lower export demand and a decline in prices.
While Iran, which is the largest buyer of Indian basmati rice, reduced its purchases by 36% in 2023, there has been an increase in shipments to other nations such as Iraq, Oman, Qatar, and Saudi Arabia. This rise in exports to these countries has offset the decline in demand from Iran.
In conclusion, Pakistan’s competitive prices and increased production have led to a decline in India’s basmati rice exports. While India experienced a record high in exports in 2020 and 2023, it is predicted that the trend will change in 2024 as buyers turn to Pakistan for their rice purchases.
Source: [Eastern Eye](https://www.easterneye.biz)
