India's basmati rice exports are expected to drop in 2024 after almost reaching a record high in 2023, as Pakistan offers grain at lower prices following increased production.
Pakistan and India, major exporters of aromatic long-grain rice, cater to markets in Iran, Iraq, Yemen, Saudi Arabia, the UAE, and the USA.
India's basmati exports grew by 11.5% to 4.9 million metric tons in 2023, generating a record $5.4 billion in revenue, thanks to higher prices and reduced competition from Pakistan.
However, Pakistan's rebound in production and competitive pricing, coupled with the depreciation of the Pakistani rupee, are making its rice exports more appealing internationally.
Challenges for Indian exporters include a 10% rise in domestic basmati production, leading to lower prices, and a significant drop in purchases by Iran, the largest buyer.
Although exports recovered from a temporary dip following the introduction of a minimum export price (MEP) by the Indian government, increased freight costs and shipping disruptions are expected to further impact exports negatively.
With buyers holding ample stocks and cautious about rising shipping costs, India's basmati rice exports face a challenging period ahead as competition with Pakistan intensifies.
