India’s Non‑Basmati Surge Steadies Global Rice Prices as Monsoon Risk Builds

India’s rice exports are rising in early 2026 on the back of strong non-basmati demand, helping cap global price gains even as basmati shipments suffer from geopolitical disruptions. FOB offers in both India and Vietnam have eased slightly in late July, but weather and policy risks around the new crop keep upside price risks alive. Global rice trade enters the second half of 2026 with India firmly anchored as the key supplier. Between January and June, India lifted exports by around 5% year-on-year to 12.27 million tonnes, almost entirely due to robust non-basmati flows into Africa and West Asia. At the same time, basmati exports slipped as tensions around Iran and the wider Middle East disrupted logistics and demand. With the Indian monsoon now covering the whole country but acreage still lagging year-ago levels, the market is watching crop progress, El Niño-related rainfall risks and any shift in India’s export stance.

Prices

Indian export prices show a mildly softer but still firm tone. Recent internal offers from New Delhi for key grades stand around EUR 0.32–0.69/kg FOB for conventional non-organic rice and EUR 1.29–1.59/kg for organic basmati and non-basmati, slightly below early-July levels, indicating modest easing after prior strength. Across Asia, independent assessments report India’s 5% broken parboiled rice near USD 356–361/t FOB in the week to 24 July, up on tight paddy supplies and patchy monsoon rains, while Thai 5% hovers around USD 450–460/t and Vietnam 5% around USD 410–415/t FOB.

Supply & Demand

India exported 12.27 million tonnes of rice in January–June 2026, up from 11.68 million tonnes a year earlier, confirming a roughly 5% year-on-year increase in shipments. Non-basmati volumes rose by about 9.6% to 8.9 million tonnes, driven by strong demand from African and West Asian buyers attracted by India’s competitive pricing and reliable availability. During this period, non-basmati shipments were about 14.2% higher than the previous year’s level, consolidating India’s role as the dominant low-to-mid grade supplier.

Basmati exports moved in the opposite direction, falling 5.5% to around 3.36 million tonnes as trade disruption linked to tensions around Iran, Iraq, Israel and the United States delayed shipments and dampened buying. Iran remains a key basmati destination, so logistical and financial constraints in that corridor had an outsized impact. However, the expansion of non-basmati business has more than offset this weakness so far, supporting overall export growth and providing a stabilising influence on global prices for import-dependent markets.

Global trade fundamentals also remain broadly supportive of ample supply in 2026/27, with international projections still pointing to record world rice trade anchored by India’s large export availability. That said, any deterioration in India’s new-crop outlook, or a sharp escalation in regional geopolitical tensions, could quickly tighten the balance sheet and lift prices, particularly for premium basmati and parboiled grades.

Fundamentals & Weather

On the production side, India’s 2026 monsoon has been uneven. The southwest monsoon covered the whole country only by 9 July, marking a slower-than-usual advance, and early-season rainfall deficits translated into lower kharif-sown area versus last year. As of mid-July, government data indicated total kharif acreage about 16% below the prior year, with paddy area also down, before a late-July revival of rainfall improved sowing progress.

At the same time, El Niño conditions are present in the Pacific, with NINO.3 sea surface temperatures roughly +1.9°C above normal, raising risk of erratic rainfall patterns into the second half of 2026. India’s government and meteorological agencies have flagged El Niño as a key downside risk to yields, while similar warnings have been issued for Thailand, where below-average rainfall could trim paddy output. These climate signals underline the importance of close monitoring of crop development across South and Southeast Asia in the coming weeks.

For now, India’s export performance in the first half of the year has ensured consistent availability for key importers, limiting upward price spikes despite weather and geopolitical noise. The second-half outlook will hinge on how quickly monsoon deficits are erased in lagging regions, reservoir replenishment, and any changes in India’s export policy as domestic food security concerns are reassessed.

3–6 Month Market & Trading Outlook

Looking ahead into late Q3 and Q4 2026, the rice market is likely to remain finely balanced. Strong non-basmati demand from Africa and Asia, coupled with India’s competitive offers and still-ample stocks, should keep benchmark global prices broadly range-bound, albeit with a firm bias if El Niño-related yield losses materialise. Basmati will remain more exposed to geopolitical developments in Iran and the wider Middle East, with any further escalation potentially constraining shipments and underpinning premiums.

Key drivers to watch:

• Progress of India’s kharif rice crop under the revived monsoon, especially in deficit states and irrigated basmati-growing belts of north-west India.
• Evolution of El Niño and its impact on rainfall distribution in India, Thailand and Vietnam during critical growth stages.
• Geopolitical risk around Iran and neighbouring markets that could disrupt basmati trade routes or payments.
• Any adjustment in India’s rice export policies in response to domestic price or stock concerns.

Trading recommendations

• Importers in Africa and West Asia (non-basmati): Use the current mild softening in FOB offers to extend coverage into Q4 2026, but avoid overbuying; consider staggered purchases to manage El Niño and policy risks.
• Basmati buyers in the Middle East and Europe: Maintain at least normal to slightly above-normal inventories, as geopolitical disruptions and tighter basmati availability could quickly lift premiums even if broader rice prices remain capped.
• Producers and exporters in India: Lock in forward sales selectively at current levels for non-basmati grades, while preserving some upside exposure in case weather or policy shocks trigger a late-year price rally.
• Industrial users and food companies: Hedge a portion of 2026/27 needs via term contracts or financial instruments, prioritising coverage for parboiled and basmati segments that are more vulnerable to supply shocks.

Short-term (3-day) directional outlook

• India FOB, New Delhi (non-basmati & parboiled): Sideways to slightly firm; export demand steady while domestic crop and monsoon news are closely watched.
• Vietnam FOB, Hanoi (5% broken & fragrant): Slightly softer bias as harvest pressure from the summer–autumn crop competes with regional demand.
• Premium basmati (India FOB): Stable to marginally firmer, with limited downside given weaker H1 export volumes and ongoing geopolitical uncertainty.