India’s Basmati Rally and Record Harvest Shift Global Rice Dynamics

Indian basmati rice prices extended their rally at the end of May, driven by firm export demand just as India becomes the world’s largest rice producer with a record 2025/26 crop. Premium 1121 varieties are leading the move, while non-basmati remains capped by abundant domestic grain supplies. India’s position as top rice producer, with output estimated above 154 million tonnes in 2025/26, reinforces its dominance in global trade and underpins competitive export offers for basmati into the Gulf, Europe and North America. Exporters are the main price driver for premium grades, while non-basmati rice trades quietly in a well-supplied domestic market. Near term, basmati prices look underpinned to slightly firmer, with some upside if export enquiries stay strong through June.

Prices & Market Tone

At the Delhi wholesale market on 28 May, premium 1121 basmati rice gained about $1.17 per quintal, with sella quoted around $106.18–107.35 per quintal and steam at $115.52–116.69 per quintal. The 1718 basmati variety saw softer interest, with sella at approximately $95.68–96.85 per quintal, while 1509 basmati held steady near $93.35–93.93 (sella) and $101.52–102.69 (steam) per quintal. In Hapur (Uttar Pradesh), basmati also rose by $1.17 per quintal to about $114.35–115.52 per quintal amid weak stockist selling and stronger exporter buying.

Converted to FOB export values and expressed in EUR, recent New Delhi offers show a broadly stable picture in May, with premium 1121 steam around €0.73/kg, 1509 steam near €0.69/kg and 1121 creamy sella about €0.66/kg. Standard non-basmati PR11 steam trades near €0.36/kg, while organic white basmati is around €1.65/kg and organic white non-basmati about €1.35/kg, indicating a substantial and persistent basmati premium over bulk grades.

Supply & Demand Drivers

India’s total foodgrain production in 2025/26 is projected near 376.6 million tonnes, with rice accounting for a record 154.024 million tonnes and pushing the country ahead of China as the largest rice producer. The domestic foodgrain balance is comfortable, which restrains non-premium rice prices. However, basmati is largely decoupled from this surplus due to strong external demand and its clear quality premium.

Exporters are the key buyers in the current rally, with steady demand from core basmati destinations in the Gulf, Europe and North America. Internationally, Asian export prices have firmed, with Indian 5% broken parboiled quoted higher in late May and competing Vietnamese and Thai origins also supported by active buying and some weather-related concerns. These global dynamics reinforce the appeal of India’s ample, competitively priced basmati supply for European and Middle Eastern importers.

Fundamentals & Weather

India’s emergence as the top rice producer strengthens its position in trade negotiations and improves structural export capacity, particularly for basmati. While Vietnam and Thailand face constraints linked to their crop cycles and drier weather risks, India enters the 2026 monsoon season with strong stocks and a record harvest behind it, tempering immediate supply-side fears for global buyers. For non-basmati segments, good availability and support from the wider pulse and grain complex limit upside despite firm regional trade flows.

Weather remains a key medium-term risk. Forecasts point to a below-normal 2026 monsoon with El Niño-type influences, raising the possibility of uneven rainfall and some pressure on kharif paddy acreage and yields. However, for now this is a forward-looking factor rather than an immediate constraint, as current basmati pricing is driven more by export enquiries and logistics than by crop fear. Any clear confirmation of weak monsoon progression would become more relevant for late-2026 and 2027 supply expectations.

Short-Term Outlook

The near-term outlook for basmati is constructive. Exporter demand for 1121 sella and steam is expected to remain active through June, with upside of roughly $1.17–2.34 per quintal (around €0.01–0.02/kg) over the next two weeks if enquiries stay firm. The 1509 and 1718 varieties are likely to follow but with more modest moves, given relatively weaker buying in 1718 and stable interest in 1509.

Non-basmati rice should remain range-bound in the short term, as generous domestic supplies and cross-commodity support from pulses and other grains keep the market well balanced. For European specialty and ethnic segments, Indian basmati offers a combination of price competitiveness and supply reliability, making it the preferred origin as long as freight and policy conditions remain stable.

Trading Outlook

• Importers (EU, Middle East, North America): Use current stable-to-firm basmati prices to secure Q3–Q4 coverage in 1121 steam and sella, prioritising suppliers with strong export track records as India consolidates its role as top producer.
• Food manufacturers & retailers: Lock in part of your basmati requirements now, while leaving some flexibility for potential further modest gains, especially in premium 1121 grades.
• Non-basmati buyers: Given comfortable Indian grain stocks and capped upside, stagger purchases to benefit from range-bound PR11 and other bulk varieties, monitoring any policy or monsoon-related shifts.

3-Day Directional View (Key Regions)

• India – Delhi basmati (1121, 1509): Slightly firmer bias; exporter buying likely to keep prices at or just above current levels over the next 2–3 days.
• India – PR11 & other non-basmati: Largely steady; abundant domestic supply and limited fresh news point to a sideways market in the very short term.
• Vietnam & Thailand export markets: Firm undertone maintained by regional demand and weather concerns, but no immediate sharp moves expected without new weather or policy shocks.