India’s basmati rice exports to fall in 2024. India’s basmati rice exports are poised to face challenges in 2024, with industry experts projecting a decline following a near-record high in the previous year.
This anticipated downturn is primarily attributed to heightened competition from neighboring Pakistan, which is offering the prized grain at competitive prices amid a resurgence in production.
Basmati rice, renowned for its distinctive aroma and long-grain quality, is a significant export commodity for both India and Pakistan.
However, India’s export performance in 2023, though robust with a 11.5% surge to 4.9 million metric tons, fell just short of the record set in 2020.
This remarkable export performance contributed to India’s status as the world’s largest rice exporter, fetching a record $5.4 billion in revenue, as reported by government data.
Vijay Setia, a prominent exporter from Haryana state in India, noted the shifting dynamics in the market.
“Last year, buyers rushed to secure supplies amidst production issues in Pakistan. However, this year, Pakistan’s competitive pricing, fueled by increased production and currency depreciation, has altered the landscape,” Setia remarked.
Echoing this sentiment, Chela Ram Kewlani, chairman of the Rice Exporters Association of Pakistan (REAP), predicted a substantial increase in Pakistan’s rice exports to 5 million tons for the 2023-24 fiscal year, up from the previous year’s 3.7 million tons.
Akshay Gupta, head of bulk exports at KRBL Ltd., pointed out the impact of Pakistan’s currency depreciation on export competitiveness.
Meanwhile, in India, a projected 10% rise in basmati rice production has failed to offset the decline in export demand, resulting in downward pressure on prices.
Changes in import patterns further compound the challenges faced by Indian exporters.
While Iran, historically a major buyer of Indian basmati rice, reduced its purchases by 36% in 2023, other countries like Iraq, Oman, Qatar, and Saudi Arabia increased their imports, as per data from India’s Ministry of Commerce and Industry.
Exporters also cited regulatory interventions, such as the imposition of a minimum export price (MEP) on basmati rice shipments, as a hindrance to export momentum.
Although the MEP was adjusted downwards after initial implementation, its impact on market dynamics persisted.
Furthermore, disruptions in shipping routes, particularly via the Red Sea, have led to increased freight costs, causing buyers to delay purchases and contributing to a further slowdown in exports.
As India’s basmati rice exports to fall in 2024, marked by intensified competition, currency dynamics, regulatory interventions, and logistical challenges.
These factors collectively point towards a potential decline in export volumes compared to previous years, signaling a need for exporters to navigate a complex and evolving market landscape.
