Short-term price spikes of 8–10% in India and 5–7% abroad are expected, but farmer resilience, government relief, and climate-smart tech keep basmati exports strong.

By Vikram Marwaha

Basmati rice is not a cereal but a fragrant heritage that represents India’s agricultural past, food pride, and a significant export item. Each year, more than 4 million tonnes of basmati rice are exported out of India and reach homes in the Middle East, North America, and Europe. In fact, the world basmati market is worth $15 billion, with India supplying over 65 per cent of its offerings.

However, the recent Punjab flooding, which has hit India’s Basmati heartland, has posed serious challenges to its harvest. Punjab alone is responsible for the huge production of India’s basmati and has millions of acres of land under cultivation. This time around, nearly 150,000 acres of basmati crops have been inundated with water, leaving local as well as international consumers concerned.

While images of submerged fields and crops paint a dismal picture, the story is not completely bleak. Farmers in Punjab, driven by grit and rising farm innovations, coupled with intensive government interventions and global demand patterns, suggest that basmati consumers worldwide can face short-term hiccups but long-term gains in terms of the cultivation and supply of basmati.

Short-term price impact and market stability

In the short term, the price will increase as basmati prices in Indian wholesale markets have already gone up 8–10 per cent because of the floods. Exporters are confident that prices abroad could see the same 5–7 per cent jump, particularly in value markets such as Saudi Arabia, the UAE, and the UK. However, experts believe that the disruption will be short-lived. Importers can maintain buffer stock for 3 to 6 months, which insulates foreign markets from sudden shocks.

Punjab’s farming community has been surprisingly resilient in the face of natural calamities over centuries. Even after the floods in the 1980s and 2010s, basmati exports accelerated positively within a year. Farmers prefer to split the land between paddy and basmati on the belief that damage in one harvest will not wipe out family incomes. Currently, close to 1 million farm households in Haryana and Punjab rely on basmati cultivation, and a few of them have already started making preparations for the next sowing season with improved techniques and technical assistance from farmer-producer organisations (FPOs). Additionally, for global consumers, this resilience will translate into the fact that agricultural activity, although hit in the short run, will not experience a lasting dip.

Resilience, innovation, and the future of basmati farming

Government and industry responses have been quick, too. Thousands of hit farmers are being provided relief, including insurance claims under the Pradhan Mantri Fasal Bima Yojana scheme. Exporters are positioning themselves alongside cooperatives so that procurement channels stay open, and some large agri-companies are investing in flood-proofed storage and logistics infrastructure. These actions keep the global supply chain stable even as there is local disruption.

Also, floods have the potential to reverse the tide of innovation in basmati farming as well. Agricultural universities in Punjab are already experimenting with flood- and climate-resilient cultivars of Basmati varieties. Concurrently, digital technologies like drone tracking, artificial intelligence-based crop tracking, and satellite imaging are assisting in evaluating damage at the field level and informing recovery. These technologies will raise yields, bring down risk, and supply a consistent stream to markets across the globe.

For consumers, the global picture is reassuring. Demand for basmati continues to increase at 6–7% per annum, driven by improving health awareness and consumers’ preference for high-quality food grains. Import countries naturally give basmati a top slot in their buying plans because of its culinary and cultural standing. Prices will certainly increase in the short term, but the long-term effect can be more sustainable and high-quality.

The Punjab floods are a harsh reminder of the risks to farmers induced by the weather. But in basmati rice, the story is one of rebirth and survival. With exports of almost $5 billion a year, the basmati industry is too important to let fail for farmers, governments, and customers worldwide. With the intent of farmers, help from governments, and innovation-based solutions, basmati will continue to adorn plates across the world. Consumers can suffer tiny price or supply fluctuations, but can rest assured that the basmati tradition will last. Most importantly, these efforts are compelling the entire supply chain, from seed to export, to adopt climate-resilient cultivation methods, ensuring that future generations can also enjoy the world’s most fragrant rice.

The author is Joint Managing Director, DRRK Food

Published Date: September 23, 2025