India’s Non‑Basmati Rice Exports Surge While Basmati Softens

India’s rice export profile is shifting toward non-basmati grades, with strong Q1 FY 2026–27 demand and rising volumes, while basmati faces softer shipments and stable-to-sideways prices. Ample Indian stocks and only modest global production risks suggest a broadly well-supplied market, but El Niño and monsoon uncertainty keep a weather risk premium in place. Robust overseas appetite for Indian non-basmati rice and pulses drove a double‑digit increase in agricultural export revenues in April–June, even as basmati exports declined in both value and volume. At the same time, recent FOB indications from India and Vietnam point to broadly stable export prices in late July and early August, suggesting that strong trade flows are currently being absorbed without triggering an immediate price spike. However, mixed monsoon performance and a forecast dip in global rice output for 2026/27 underline that weather and policy decisions in key exporters will remain critical for price direction in the coming months.

Prices

FOB quotes in New Delhi on 1 August 2026 indicate a broadly stable market in recent weeks. Compared with mid‑July, most Indian grades are flat or marginally lower in EUR terms, pointing to comfortable nearby supply despite export growth in non‑basmati segments.

The modest easing across most origins is consistent with strong availability and record Indian public stocks built ahead of the 2026 kharif season, limiting near‑term upside despite ongoing global weather concerns.

Supply & Demand

India’s agricultural exports under APEDA grew by about 14% year‑on‑year to USD 7.64 billion in April–June, with non‑basmati rice the key driver. Non‑basmati rice export value increased roughly 12% to USD 1.59 billion, while shipment volumes surged about 32% to 4.38 million tonnes, highlighting exceptionally strong price‑competitive demand.

By contrast, basmati rice exports softened. Earnings slipped around 3% to USD 1.44 billion, with volumes declining from about 1.73 million tonnes to 1.54 million tonnes. This divergence shows importers tilting toward cheaper non‑basmati origins amid tight budgets and ample Indian supply, while premium basmati faces both weaker demand in some key Gulf markets and increased competition from rival fragrant rice exporters.

Globally, early projections for 2026/27 point to a small decline in world milled rice output, largely due to El Niño‑linked yield risks in parts of South and Southeast Asia. The USDA expects world production to fall by about 1.6% from the 2025/26 record, which, while modest, could tighten balances if demand continues to rise and if any major exporter re‑tightens trade policies.

Fundamentals & Weather

India entered FY 2026–27 with exceptionally high public rice stocks (over 68 million tonnes in early June), more than five times the official buffer norm. This cushions both domestic food security and export programmes, enabling continued strong non‑basmati shipments in Q1 despite a mixed monsoon start.

The 2026 southwest monsoon has been uneven, with an early‑season rainfall deficit and subsequent localized heavy rains. Official and independent forecasts highlight an elevated risk of below‑normal rainfall over the season, especially in August–September, as El Niño develops. For rice, this raises uncertainty over final kharif yields, particularly in rain‑fed areas with limited irrigation, and could re‑introduce a weather premium into prices later in the season if crop conditions deteriorate.

At the same time, India has recently shifted from outright bans toward a more managed export regime, using registration and occasional duties to balance domestic inflation and export opportunities. Given current record stocks and strong Q1 non‑basmati flows, the base case is for continued export availability, but a sharp monsoon shortfall or domestic price spike could still trigger fresh policy intervention—an ongoing structural risk for import‑dependent buyers.

Short-Term Outlook & Trading Ideas

Over the next few weeks, the rice market will balance strong Indian non‑basmati exports and comfortable stocks against weather‑related production risks and any new policy moves. With FOB values slightly softer into early August and no immediate supply shock, the near‑term tone is mildly bearish to sideways, but the risk skew for Q4 2026 remains upward if El Niño weighs on Asian crops.

• Importers: Use current flat‑to‑slightly‑lower FOB levels from India and Vietnam to extend coverage modestly into Q4, prioritising non‑basmati grades where India’s export momentum and stocks are strongest.
• Buyers needing basmati: Given weaker Q1 export volumes and geopolitical frictions in some Gulf destinations, avoid excessive short positions; stagger purchases and watch freight and policy headlines closely.
• Producers and exporters: Consider incremental forward sales at current levels to lock margins, but retain flexibility for potential upside in case monsoon conditions worsen or if other exporters face weather‑induced supply cuts.

3‑Day Directional Price View (Key FOB Origins, in EUR)

• India – non‑basmati (PR11, Sharbati): Sideways to slightly soft (around 0.31–0.33 EUR/kg FOB New Delhi) as export demand is strong but stocks remain ample.
• India – basmati (1121, 1509, premium sella): Broadly sideways (approximately 0.60–0.82 EUR/kg FOB), with modest downside risk if basmati export demand stays subdued.
• Vietnam – white and Jasmine: Sideways (around 0.33–0.35 EUR/kg FOB Hanoi), tracking global benchmarks and India’s pricing while monitoring regional crop weather.