Indian Rice Exports Under Pressure While Prices Stay Competitive

India’s rice market is caught between softer export earnings and strong price competitiveness. Export values for non-basmati fell more than 10% in FY 2025-26 despite higher shipment volumes, as demand from key African buyers weakened and competition from Thailand, Vietnam and Pakistan intensified. Yet India’s large stocks and still-low FOB offers keep it well positioned to defend market share if weather-related production issues tighten Asian supply in 2026-27. The market environment is defined by three interacting forces: subdued African demand after heavy 2024-25 buying, currency and liquidity stress in several African economies, and aggressive price competition from alternative origins. At the same time, India retains a structural cost edge and holds sizeable public stocks that can underpin export flows if El Niño-related risks curb crops elsewhere in Asia. Short term, sentiment in parboiled and non-basmati segments is mildly bearish, but downside appears limited given India’s role in nearly 40% of global rice trade.

Prices

Indian benchmark 5% broken rice remains the cheapest major origin at about USD 350/t FOB, undercutting Pakistan by roughly USD 40/t, Vietnam by USD 60/t and Thailand by around USD 145/t. Domestic export offers from New Delhi also show slight easing in June.

Converting recent FOB offers to EUR (assuming 1 EUR ≈ 1.07 USD) indicates approximate levels of EUR 327/t for Indian non-basmati PR11 steam (USD 0.35/kg) and EUR 776/t for higher-grade golden sella (USD 0.83/kg). These values confirm that, despite softer demand, India is maintaining low price points and even trimming offers marginally across key varieties.

Supply & Demand

India exported just over 15 million tonnes of non-basmati rice in FY 2025-26, up 6.5% in volume terms, but export value slipped to USD 5.86 billion from USD 6.53 billion a year earlier. The main drag was weaker demand from West and Central Africa and parts of ASEAN, offset only partially by higher shipments to South Asia, East Africa, West Asia and other Southern African markets.

African buyers had accumulated sizeable stocks in 2024-25 after India lifted earlier export restrictions. These inventories, combined with foreign exchange shortages in countries such as Nigeria, Senegal and Benin, sharply reduced fresh buying. Some importers sought local currency settlement, but Indian exporters’ reluctance to accept these terms slowed contracting and contributed to lower order books.

India’s previous export curbs from 2022, introduced after unseasonal rains and El Niño hit paddy output, also pushed African customers to sign longer-term contracts with suppliers in Thailand, Vietnam and Pakistan. This eroded India’s continuity in African supply chains and made post-2024 recovery of market share more difficult.

Fundamentals & Competitiveness

The competitive landscape has turned more challenging. Weaker Thai and Vietnamese currencies and aggressive Pakistani pricing have narrowed the cost advantage Indian exporters enjoyed, especially in parboiled grades heavily consumed in Africa. In some tenders, Pakistan has undercut India, while Thailand leverages premium quality positioning where buyers can afford higher prices.

Even so, India remains the most competitive large-scale supplier on absolute price terms. The Food and Agriculture Organisation notes that quiet trading has kept Indian quotations steady to slightly lower, with parboiled market sentiment turning bearish on the back of Africa’s subdued demand. Intense competition among Indian exporters themselves further restrains offer levels, compressing margins but helping to defend global market share.

On the supply side, India holds about 68.34 million tonnes of rice stocks, including 28.7 million tonnes in paddy form. These comfortable inventories provide a strong buffer against domestic crop risks and enable sustained export flows if global conditions tighten due to weather or policy moves in competing origins.

Weather & Outlook

Looking ahead to 2026-27, the USDA expects India to retain roughly 40% of global rice trade, with the Philippines, Vietnam and China among the main importers. El Niño-related weather risks across parts of Asia could curb production in some origins, lifting overall import demand and potentially improving India’s export prospects.

Should any significant production shortfalls emerge in Southeast Asia, India’s large stock position and already competitive prices leave it well placed to step in, particularly in non-basmati and parboiled segments. In that scenario, current subdued prices may find a floor, with upside led more by global tightness than by domestic cost pressures.

Trading Outlook (Next 4–8 Weeks)

• Importers in Africa: Use current weak sentiment and low Indian FOB values to quietly extend coverage for late 2026, especially if domestic stocks are drawing down faster than expected.
• Asian buyers (Philippines, China, others): Consider staggered forward purchases from India to hedge against potential El Niño-related supply shocks in Southeast Asia.
• Indian exporters: Focus on markets where dollar liquidity is more secure and logistics less exposed to Iran-related freight surcharges, while selectively accepting thinner margins to maintain volumes.

3-Day Directional Outlook (EUR-based FOB)

• New Delhi (India, non-basmati and parboiled): Sideways to slightly softer; competition and weak African demand cap any rallies.
• Hanoi (Vietnam, long white and fragrant): Mostly steady; pricing remains higher than India but supported by stable regional demand.
• Thai 5% broken (reference for premium Asia): Firm to slightly supported relative to India, reflecting currency effects and quality premiums.