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Prices of basmati rice had started falling in September last year, as global buyers shifted to Pakistan after India introduced a minimum export price to ensure local supplies. The government subsequently removed the cap but by that time, buyers had already placed orders with Pakistan, which led to an oversupply of basmati rice in the domestic market, pulling the prices down. Buyers have now returned to India amid concerns over potential supply disruptions.
“Prices have gone up 8-10% in the last 15 days. There is fear in the global rice market that the rising tension between India and Pakistan may disrupt the supply of basmati rice, and the cost will escalate,” said Gautam Miglani, director of LRNK, a Haryana-based exporter of basmati rice. “This is prompting global buyers, particularly from the Middle East, to increase imports from India,” he said.
Countries like Saudi Arabia, Iran and Yemen are picking up large volumes of basmati rice from India, said exporters. US buyers are also in the market to lift stock before the 90-day window on the Trump tariff ends, they said.A potential escalation between India and Pakistan could disrupt supply chains and inflate prices significantly, said Akshay Gupta, business head for bulk export at KRBL, which sells basmati rice under the India Gate brand.“Conflict affects countries both directly and indirectly, influencing their economies and the flow of trade between them, which subsequently impacts internal economies. Peace and stability are essential for maintaining uninterrupted agricultural supply chains, especially for essential staples like basmati rice,” he said.
“With over 70% of global basmati exports originating from India, even a slight disruption can ripple through supply chains, strain importing nations, and escalate costs,” the KRBL executive added.
“Iran has just placed a tender to buy 50,000 tonnes of rice, which has boosted the sentiment for the basmati rice trade,” said Suraj Agarwal, chief executive of Kolkata-based RiceVilla Group, which sells rice in India and abroad.
In FY24, India had exported 5.24 million tonnes of basmati rice, earning Rs 48,389 crore in foreign exchange, according to the Agricultural and Processed Food Products Export Development Authority (APEDA).
US buyers import more than 300,000 tonnes of basmati rice from India annually, said LRNK’s Miglani. “It takes 60-70 days to ship rice to the US. So, they are placing orders now so as to get the commodity before the Trump tariff comes into effect.”
Rice mills in Punjab and Haryana are not getting adequate workers for the rice mills, which is impacting the supply side,” said Agarwal.
