Basmati Rice Battle: Pakistan Outprices India in 2024
Shift in Pakistan Basmati Rice Export Dynamics
Pakistan Rice Export – The landscape of basmati rice exports is set for a significant turn in 2024. After achieving near-record heights last year, India’s basmati rice exports are poised for a downturn. Competing head-on, Pakistan emerges as a formidable player, offering this premium long-grain rice at more attractive prices, thanks to a production resurgence, say industry insiders.
Pakistan Rice Export Role in Global Markets”
Both India and Pakistan hold the crown as top exporters of basmati rice, cherished worldwide for its distinctive aroma. Key markets include Iran, Iraq, Yemen, Saudi Arabia, the United Arab Emirates, and the United States. In 2023, India saw a remarkable 11.5% jump in its basmati exports, reaching 4.9 million metric tons, a whisper away from the 2020 peak of 5 million tons. This surge was fueled by Pakistan’s reduced output and increased stocking by importers, according to industry experts.
Pakistan’s Pricing Puts Pressure on Indian Exports
India’s position as the global rice export leader was reinforced with a record $5.4 billion in basmati rice sales in 2023, marking a 21% increase from the year before, propelled by elevated prices, reveals government data. “Last year, the market scrambled to stockpile amidst Pakistan’s production dip. This year, Pakistan’s lower pricing, driven by a boost in production, puts them in a competitive stance,” notes Vijay Setia, a prominent Haryana-based exporter.
Future Outlook for Pakistan Rice Export
Predictions by Chela Ram Kewlani, head of the Rice Exporters Association of Pakistan (REAP), indicate a possible leap in Pakistan’s total rice exports to 5 million tons in the 2023/24 financial year, up from 3.7 million tons previously. Factors like the Pakistani rupee’s depreciation have enhanced the competitiveness of Pakistan’s rice exports, adds Akshay Gupta from KRBL Ltd.
Concurrently, India faces dwindling export demand as basmati rice production climbs by an estimated 10%, leading to price reductions within the country, Gupta mentions.
Changing Tides in Global Basmati Consumption
Despite a 36% cutback in purchases by Iran, India’s largest basmati buyer, increased exports to Iraq, Oman, Qatar, and Saudi Arabia compensated for the loss, data from India’s Ministry of Commerce and Industry show. Indian exports experienced a brief slowdown in late 2023 due to the imposition of a minimum export price on basmati rice, but soon regained momentum.
In a strategic move, India set the basmati export price at $1,200 per ton in August, well above the market rate, later adjusting it to $950 in October. Yet, the beginning of 2024 witnessed a softening in exports as buyers postponed purchases amid rising freight costs and shipping disruptions through the Red Sea, observes exporter Vijay Setia.
“Given the ample stockpiles, buyers are in no hurry,” he concludes
