India's basmati rice exports could jump 15% as key buyers stock up
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India's exports of premium basmati rice are likely to jump 15% over last year as key buyers in the Middle East build their inventories despite prices jumping by nearly a quarter, leading exporters told Reuters.
Higher basmati exports would keep local prices firm, helping Indian farmers earn more by pushing paddy prices up to a record high.
"After the Ukraine war, buyers are afraid of a sudden supply disruption. Every buyer is trying to have enough stocks," said Vijay Setia, former president, All India Rice Exporters Association.
India could export more than 4.5 million tonnes in 2022/23 financial year started on April 1, up 15 % from a year ago, he said. Trade ministry data showed that exports rose 11% to 2.16 million tonnes in the first half of 2022/23.
Graphic: India's basmati rice exports
A sharp drop in freight charges from this year's peak was also prompting importers to buy more, Sethia added.
India, the world's biggest rice exporter, mainly exports top grade basmati rice to the Middle East and non-basmati rice to African and Asian countries. The country has put restrictions on exports of non-basmati rice to calm local prices.
Iran, traditionally the biggest buyer of Indian basmati rice, was an purchasing actively in the past few months, but countries like Iraq and Saudi Arabia have been more active of late, said Anil Mittal, chairman and managing director KRBL Ltd, a leading rice exporter.
Iran, Saudi Arabia, Iraq, United Arab Emirates, and Yemen account for nearly two-thirds of India's basmati rice exports.
Graphic: Top ten buyers of India's basmati rice
"Exports prices rose in the past few months, but still demand is there. Iran is not active but Saudi Arabia and Iraq bought 150,000 tonnes each last month," Mittal said.
Export prices for the grain have jumped to over $1,450 per tonne from around $1,160 a year ago.
Higher exports have lifted prices of traditional basmati paddy to a record 60,000 rupees per tonne in India, Mittal said.
India's basmati rice production was expected to jump by around 20% after farmers expanded area under the crop, but untimely rainfall in September and October capped the upside in the production, Mittal said.
