India remains the powerhouse of the global rice trade, accounting for 35% of world rice exports. Global prices of rice have hit an 8-year low after New Delhi lifted the export curbs in March this year.

By Manisha Gupta

“Today, Thailand rice is at par with Indian prices, about $360-375 a tonne, which was never the case. Thai (rice) used to be at least $30-40 higher than Indian rice, but today they are at the same price. So, of course, some of the demand has shifted to the other countries,” Himanshu Agarwal, Managing Director of Satyam Balajee, a Chhattisgarh-based rice exporter, told CNBC-TV18. 

The return of Indian rice into the global market, after a near two-year long restriction on certain exports, led to a sharp fall in global prices. As a result, benchmark prices in Thailand fell to an eight-year low earlier in July before recovering slightly. 

The US rough rice futures is down 17% from a year earlier despite a 2.5% rally last week. Traders cite oversupply and anticipation of further policy adjustments as key factors influencing market sentiment.

India’s government warehouses now hold 55.66 million tonnes of rice and unmilled paddy, four times higher than the official target of 13.5 million tonnes, and up 15% compared to July last year.

This surge reflects bumper harvests and increased procurement by government agencies, driven in part by a higher Minimum Support Price (MSP) and assurances of large-scale official purchases. “The government needs to find a way to channelise this stock into the export market in a better way,” Agarwal said.

In line with its biofuel policy, India has allocated 5.2 million tonnes of rice for ethanol production this year. An additional 10% broken grain is being sold to private sector buyers, helping manage excess stocks and support alternative revenue paths for the rice sector.

Sowing for the 2025 Kharif season is up by 12.4% year-on-year, with rice cultivation spreading across 17.67 million hectares. Favorable government support policies have encouraged more farmers to bring additional acreage under rice, bolstering the country’s food security reserves.

Published Date: July 29, 2025