Basmati And Non-Basmati Rice Exports Flourish, But Challenges Await

The financial year 2022-23 has witnessed a significant surge in basmati and non-basmati rice export, signalling a positive trend for traders, farmers, and processors. However, certain challenges and market dynamics call for careful consideration for the stakeholders. Let’s delve into the recent export statistics, the current state of the domestic market, prices & challenges.

Rice Exports: Reaching New Heights

1. Basmati Rice

• Increasing Export Volume: During 2022-23, basmati rice exports grew by an impressive 15.64%, totalling 45.60 lakh tons, compared to 39.43 lakh tons in 2021-22.
• Boosting Export Value: Basmati rice export value soared to 38,524 crore rupees in 2022-23, a significant rise from 26,390 crore rupees in 2021-22.

2. Non-Basmati Rice

• Marginal Increase in Export Volume: Non-Basmati rice exports witnessed a modest growth of 2.88% during 2022-23, amounting to 177.86 lakh tons, compared to 172.88 lakh tons in 2021-22.
• Expanding Export Value: The export value of non-Basmati rice reached 51,089 crore rupees in 2022-23, compared to 45,725 crore rupees in the previous financial year.

Current Market Scenario

This is the current market status:

• Increased Export Demand: Following a decline in basmati rice prices, exporters are now showing an increased interest in lower prices. As a result, the market has begun quoting prices higher by 100/200 rupees per quintal.

• Favourable Demand For Thick Rice: There is demand for thick rice, also known as mota rice, in both domestic and export markets. Wholesalers are purchasing rice from mandis and selling it to countries like Bangladesh and Nepal, while exporters are acquiring rice from ports like Gandhidham and Visakhapatnam due to increased demand from Gulf countries, & the USA.

Current Market Prices

In mandis, the current prices are:

• Pusa 1121 Basmati Steam Rice- Price ranges from 8,800-9,000 rupees per quintal.
• Sela Rice– Priced between 8,000-8,200 rupees per quintal.
• Pusa 1509 Sela Rice- Priced at 7,200-7,400 rupees.
• Steam Rice– Priced at 8,300-8,500 rupees per quintal.

Challenges Ahead 

Here are the challenges that can hamper market growth:

• Basmati Rice Price Decline: According to traders, recently there has been a slowdown in the basmati rice prices in the domestic market. While exporters’ demand is weak, paddy arrival in mandis in producing states will increase in the ongoing season, which has led to increased paddy harvesting. It is believed that with the arrival of increased paddy in mandis, there will be a price decline in basmati rice in the domestic mandis.

• Weather Risks and Crop Damage: The Terai region of Uttar Pradesh is experiencing intermittent deteriorating weather conditions, increasing the risk of damage to standing crops.

• Reduced Trading Activity in Domestic Mandis: The implementation of a scheme for the free distribution of rice until 31 December 2023 has resulted in reduced trading activity in domestic mandis, as it caters to consumer needs more conveniently.

OFB’s Insight

The surge in basmati and non-basmati rice exports during the financial year 2022-23 brings promising prospects for traders, farmers, and processors. However, challenges such as declining domestic prices, weather risks, and changing market dynamics require careful consideration. Traders should monitor market trends closely and evaluate the impact of crop arrivals on prices. Farmers need to be vigilant in safeguarding their crops from adverse weather conditions. Processors should focus on meeting the increasing demand for thick rice in both domestic and export markets. By navigating these challenges, stakeholders can capitalize on the export growth and contribute to a thriving rice industry.

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