Growing Exports
Basmati rice exports have witnessed a significant surge, recording a 12.3% increase at 4.11 million tonnes during the January 2023-24 fiscal year. This is reported by the Agricultural and Processed Foods Exports Development Authority (APEDA). In value terms, the growth is an impressive 20.2%, reaching $4.59 billion. This substantial rise is attributed to heightened demand from key markets such as Saudi Arabia and Iraq.
Price Challenges In Rice
Despite the positive export growth, the average price until January has slightly dipped compared to the previous year. The decline is linked to a lower basmati paddy yield during the harvesting period of October-December 2022 compared to the same period in 2023. However, exporters note that the export realization has increased by less than 10%, while paddy prices have surged by 20-25% in the current fiscal year.
In the domestic market, Pusa Basmati 1509 is priced at $0,39 or €0,35 per kg, Pusa Basmati 1718 at approximately $0,46 or €0,42 per kg in November 2023, and traditional Basmati CSR 30 is priced higher. The prominent Pusa 1121 is sold at a reasonable price, reflecting a notable increase compared to the previous year.
Challenges in the Global Arena
The industry faces challenges due to a temporary slowdown in demand from overseas buyers following the Red Sea issue, leading to increased freight costs. Despite this, a former president of the All India Rice Exporters Association believes such disruptions are often transient and expresses optimism for a return to normalcy.
Foreign trade policy experts highlight that the current basmati export price decline responds to global trade demand sentiments and competitive supply pressure. Furthermore, market analysts anticipate a recovery in export prices as the domestic and export markets find equilibrium. There are positive indications after the festival season in West Asia.
In conclusion, despite a decline in Basmati export prices, the Indian exporters exhibit resilience in the face of challenges. The rice industry has experienced significant export growth, with a notable surge of 12.3% in volume and an impressive 20.2% in value during the January 2023-24 fiscal year. While facing price challenges in the domestic market, the industry maintains a positive outlook. Therefore, this results in temporary challenges in the global arena. The industry anticipates a recovery in export prices post the festival season in West Asia, and official sources view the price drop as an average market trend. With most shipments already dispatched, officials project a continued upward trend in exports for February and March.