Indian rice exporters are balancing policy uncertainties, supply constraints, and market dynamics. Optimism remains for the potential easing of restrictions.

Restrictions imposed by the Indian Government are expected to persist at least until the first half of 2024 (Image: Unsplash)

Indian rice exporters are gearing up for a challenging year ahead, anticipating policy uncertainties and supply constraints to hinder the normalization of rice exports from the country. Despite global repercussions and multi-year high prices, restrictions imposed by the Indian Government are expected to persist at least until the first half of 2024.

Government’s Impact

The Indian Government’s interventions in 2023, including banning non-Basmati white rice exports, imposing duties on parboiled rice exports, and setting minimum export prices for Basmati, continue to resonate in the market. These measures were implemented to stabilize domestic prices and ensure sufficient supply for the country, intensifying challenges for exporters. 

Supply Challenges

The fall in rice production during the 2023-24 kharif season, attributed to El Nino-induced dry weather conditions, complicates the supply situation. The U.S. Department of Agriculture’s projection for total rice production in India for the October-September period reflects a decline from the previous year.

Price Dynamics

Despite trade curbs, local rice prices have remained robust, prompting government warnings to retailers. Procurement prices offered by certain State Governments and strong demand from southern States are sustaining a high-price environment, likely to persist until the next harvest season.

West Africa, a significant consumer of Indian rice, is experiencing subdued demand due to price sensitivity. While demand from Southeast Asia and some Gulf countries remains stable, exporters anticipate challenges in West Africa. Basmati rice exports face hurdles due to higher logistics costs and minimum export prices, although exporters believe adjustments will occur without significant disruptions.

India’s rice stocks in the Food Corporation of India’s central pool have increased year-on-year, providing hope for potential relaxation of export constraints. Despite initial procurement challenges, exporters remain optimistic about improving paddy availability for exports.

Published Date: February 17, 2024