Paddy Report As On 21st May 2026 by Amit Gupta, Kedia Advisory
Highlights
* Prices dropped over 6% in a month due to export disruptions as War in the Middle East holds up 200,000 tonnes of basmati rice.
* India’s rice exports, continue to be hit by the West Asia war with shipment value falling by 6% in April.
* Unsold stocks from the previous Kharif season are still being offered at discounts to clear space for the new crop.
* The conflict in West Asia has pushed shipping insurance and freight costs up by 25–30%, making Indian rice less attractive.
* As per 2nd Adv Est, Rice production for 2025-26, expected at 1239.28 Lakh tonnes up by around 1% from last year.
* Countries in Africa have rushed to renew depleted inventories after India’s policy shift, boosting export orders.
* Bumper government stocks of 60.4 million tonnes might lead to market-dumping if storage capacity reaches critical limits.
* Global rice production in 2025-26 is forecast at 561.6 million tonnes, up 2% and an all-time high – FAO
* Major buyers like Indonesia and the Philippines have imposed new "quality-based" restrictions, slowing down the pace of Indian shipments.
* Below-normal monsoon (92% LPA) could trigger a bullish price reversal by late Q3 if planting targets are missed.
* For 2026/27, World rice production is forecast down 5.0 million tons to 537.8 million tons, the first decrease since 2015/16 - USDA
* For 2026/27, Global consumption is projected 3.8 million tons higher to a record 541.4 million, on higher use by several countries – USDA
* For 2026/27, Global ending stocks are projected at 192.7 million tons, down 3.6 million, largely on reduced stocks for India – USDA
* USD/INR depreciation beyond 96.75 would enhance export realizations
* FAO forecasts global rice stocks to hit peak of 217.7 million tonnes
Strengths
* As per USDA, India’s stocks to use ratio for 2026-27 to drop 7.05% from 2025-26
* Reports from Punjab and Haryana indicate farmers are considering shifting 10-12% of traditional Basmati acreage to shorter-duration non-basmati varieties
* India maintains a dominant 6.5 million MT global export share, ensuring structural pricing control
* Andhra Pradesh targets record 23 lakh mt rabi paddy procurement
* India permits 2.3 lakh tonnes of rice export to Maldives for 2026-27
* Unseasonal rain and hail damage standing crops in AP and Telangana
* Heavy rains damaged over 2 lakh hectares of crops, including standing paddy in Maharashtra.
* Countries in Africa have rushed to renew depleted inventories after India’s policy shift, boosting export orders.
Weaknesses
* Prices dropped over 6% in a month due to export disruptions as War in the Middle East holds up 200,000 tonnes of basmati rice.
* As per 2nd Adv Est, Rice production for 2025-26, expected at 1239.28 Lakh tonnes up by around 1% from last year.
* 15.19% increase in Rabi paddy acreage yoy, signaling a massive supply glut.
* India’s rice exports, continue to be hit by the West Asia war with shipment value falling by 6% in April.
* Unsold stocks from the previous Kharif season are still being offered at discounts to clear space for the new crop.
* IGC raised the global rice production forecast to 548 million tonnes for 2026/27, citing "modest acreage gains"
* The conflict in West Asia has pushed shipping insurance and freight costs up by 25–30%, making Indian rice less attractive.
Opportunities
* Below-normal monsoon (92% LPA) could trigger a bullish price reversal by late Q3 if planting targets are missed.
* Middle East countries increasing imports for food security reserves could provide 5-6% volume growth in non-war-affected markets.
* USD/INR depreciation beyond 96.75 would enhance export realizations
* For 2026/27, World rice production is forecast down 5.0 million tons to 537.8 million tons, the first decrease since 2015/16 - USDA
* For 2026/27, Global consumption is projected 3.8 million tons higher to a record 541.4 million, on higher use by several countries – USDA
* For 2026/27, Global ending stocks are projected at 192.7 million tons, down 3.6 million, largely on reduced stocks for India – USDA
* Geopolitical tensions near the Strait of Hormuz have increased "risk premiums" on grain shipments, can drive up prices.
* Private millers are stocking up heavily, anticipating even higher export demand by May
Threats
* Bumper government stocks of 60.4 million tonnes might lead to market-dumping if storage capacity reaches critical limits.
* Global rice production in 2025-26 is forecast at 561.6 million tonnes, up 2% and an all-time high – FAO
* FAO forecasts global rice stocks to hit peak of 217.7 million tonnes
* Due to Strait of Hormuz disruptions, slower vessel turnaround times have led exporters to reduce their paddy purchase bids.
* Vietnam recently slashed its 5% broken rice prices to $355–$360/MT to stay competitive, forcing Indian exporters to follow suit.
* Major buyers like Indonesia and the Philippines have imposed new "quality-based" restrictions, slowing down the pace of Indian shipments.
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