India has registered record rice production in the 2024–25 crop year, with kharif rice output reaching 1,206.79 lakh tonnes and rabi rice at 157.58 lakh tonnes. This marks a sharp increase in kharif rice by 74.20 lakh tonnes compared to the previous year. The government has procured 75.80 million tonnes of paddy, bolstering domestic stocks and ensuring farmer support. With the surplus in hand, India lifted the export ban on broken rice on March 7, creating an export potential of over 2 million metric tonnes. However, weak global demand and rising economic costs have kept domestic prices largely steady, with limited upside seen in the near term.

Key Highlights

• India’s kharif rice output surged by 74.20 lakh tonnes in 2024–25.
• Government lifted the broken rice export ban effective March 7, 2025.
• FCI holds 37.9 million tonnes of rice, excluding 30 MT receivable.
• Global rice trade faces oversupply and sluggish import demand.
• Rising MSP and transport costs to lift rice handling cost to ₹4,173/quintal by FY26.

Domestic rice prices in India have remained largely stable despite a record harvest and sluggish global demand. The sharp rise in kharif rice production—up by 74.20 lakh tonnes from last year—has ensured ample supply. Steady procurement by the government, which has already bought 75.80 million tonnes of paddy, has further supported price stability and strengthened foodgrain inventories.

India’s decision to lift the ban on broken rice exports on March 7 has opened the gates for over 2 million metric tonnes of potential exports, especially to Africa, China, and for ethanol blending. While this may help reduce inventories, the impact on prices is likely to be modest in the short term due to global oversupply.

FCI currently holds 37.9 million tonnes of rice, well above the April 1 buffer norm of 21.41 million tonnes, with 30 million tonnes still pending from millers. Additionally, 1.7 million tonnes have been sold via OMSS and 2.3 million tonnes allocated for ethanol production. On the downside, the rising economic cost of rice handling—expected to reach ₹4,173/quintal in FY26—is straining food subsidy finances, driven by higher MSP and logistical expenses.

Globally, weak demand and ample supply are pressuring rice prices. South America is ramping up production, while nations like Indonesia and the Philippines are cutting imports. Thai and Vietnamese rice markets also face price pressure due to new arrivals and temporary supply tightness.

Finally

Amid surplus stocks and rising costs, rice prices are likely to stay range-bound in the near term, with mild support expected from seasonal demand and MSP-led procurement.

Published Date: March 25, 2025