This year, the prices of new season basmati rice in India have experienced a notable increase, driven by strong demand from leading buyers in the Middle East and Europe. As a result, bulk purchasers in wholesale grain markets are now paying 10% to 15% higher prices compared to the previous year.
The recent reduction in the floor price for basmati rice exports from $1,200 per ton to $950 per ton has sparked a surge in export contracts. This increase in demand has led to higher prices in the wholesale markets of major grain-producing states, according to farmers.
This month, Reuters reported that India has signed contracts to export around 500,000 metric tons of new season basmati rice, highlighting the brisk overseas sales of this premium aromatic variety.
The wholesale prices of a leading variety of basmati rice have surged to approximately 50,000 rupees ($599.93) per ton, marking an increase from 45,000 rupees per ton the previous year, as stated by Sukrampal Beniwal, a basmati rice grower from the northern state of Haryana.
He mentioned that prices for certain other varieties have reached 46,000 rupees per ton, compared to the previous year’s rate of 40,000 rupees.
“Rice millers and exporters are flocking to wholesale markets to buy basmati from us to meet their export obligations and it looks like demand is likely to be strong,” Beniwal said.
According to the most recent survey conducted by Local Circles, a consultancy based in New Delhi, households, particularly in urban areas, are allocating 20% to 40% higher expenditures on their consumption of basmati rice.
Every year, India exports over 4 million tons of basmati, a premium long-grain variety renowned for its aroma, to countries such as Iran, Iraq, Yemen, Saudi Arabia, the United Arab Emirates, and the United States, among others.
Rice also holds a substantial market share in Europe.
In July, India implemented a restriction on the export of non-basmati white rice to stabilize domestic prices. Subsequently, a minimum floor price was established for basmati rice exports.
Read More: India prohibits non-basmati white rice exports amidst supply concerns