Rice prices surge by 10-15% in India as global demand rises
By Sutanuka Ghoshal
Rice prices in the domestic market have increased 10-15% as the global demand for Indian rice has shot up following the government’s decision of September 28 to withdraw the export curbs on non-basmati rice, even as global rice prices have fallen up to 15%.
The government exempted non-basmati white rice from export duty while reducing the levy on parboiled rice to 10%. The duty cut came within a fortnight of its decision to remove the minimum export price of basmati rice. The measures came at a time when the country had ample stock of rice at government godowns.
Global rice prices had soared to their highest level in more than 15 years following India’s decision last year to ban the export of white rice and impose a 20% duty on parboiled rice exports.
“Prices of a certain variety of Thai rice, which was selling at $800 per tonne, have come down to $710 per tonne over the last few days. There is a price pressure on rice that is supplied to the global markets from Thailand, Vietnam and Philippines as India has opened up its exports,” said Suraj Agarwal, CEO of RiceVilla, a rice marketing and exporting firm.
Suppliers from Thailand, Vietnam and Pakistan are responding to India’s move by lowering their export prices, according to rice exporters.
India’s rice exports in 2023-24 totalled $10.42 billion, down 6.5% from the previous financial year. This was mainly due to a decline in non-basmati rice shipments following the export curbs announced by the Centre. India has a 45% share of the global rice market and its top export destinations include Iran, Saudi Arabia, China, Benin and the United Arab Emirates.
However, as the global demand for rice has gone up after the withdrawal of export curbs, domestic prices have started rising and will pinch the consumers during the festive season along with increasing prices of edible oils, vegetables and other agricultural commodities.
“Domestic prices of rice will remain firm till the new crop comes. The global demand for rice is huge,” said Keshab Kumar Halder, managing director of HVL, an exporter of parboiled rice.
Prices of Swarna, the most common rice, which is exported to Africa and other smaller nations have increased to Rs 41 per kg from Rs 35 per kg.“Prices of all kinds of non-basmati rice have gone up in the last one week by 10-15%. They are unlikely to come down any soon,” said Agarwal.
This article has been republished from The Economic Times