Workers weigh and pack paddy bags at Sitapur market, in the northern state of Uttar Pradesh, India October 20, 2023. REUTERS/Rajendra

NEW DELHI, Nov 28 (Reuters) – New season basmati rice prices in India have surged this year due to robust demand from the world’s top buyers in the Middle East and Europe, forcing bulk buyers in wholesale grain markets to pay 10% to 15% more than last year.

Last month’s decision to cut a floor price for basmati rice exports to $950 a ton from $1,200 a ton has spurred a flurry of export contracts, boosting demand and pushing up prices in most wholesale markets of top grain growing states, farmers said.

This month, Reuters reported that India signed contracts to export about 500,000 metric tons of new season basmati rice, indicating brisk overseas sales of the premium aromatic variety.

Wholesale prices of one of the top basmati rice varieties have jumped to around 50,000 rupees ($599.93) a ton, up from 45,000 rupees a ton last year, said Sukrampal Beniwal, a basmati rice grower from the northern state of Haryana.

Prices of some other varieties have touched 46,000 rupees a ton against last year’s 40,000 rupees, he said.

“Rice millers and exporters are flocking to wholesale markets to buy basmati from us to meet their export obligations and it looks like demand is likely to be strong,” Beniwal said.

Households, especially in urban areas, are spending 20% to 40% more on their basmati rice consumption, according to the latest survey by Local Circles, a New Delhi-based consultancy.

India annually exports more than 4 million tons of basmati – a premium long-grain variety famed for its aroma – to Iran, Iraq, Yemen, Saudi Arabia, the United Arab Emirates and the United States, among others.

Europe is another big market for the rice.

India in July imposed a ban on non-basmati white rice exports to stabilize domestic prices and later set the floor price for basmati rice exports.

($1 = 83.34 rupees)

Published Date: November 29, 2023