Basmati rice exporters have sustained earnings this marketing year (starting October 2024) on the back of higher export volumes, despite a sharp fall in contracted rates and the absence of a minimum export price (MEP).
Trade sources indicate that May’s average basmati export price fell over 23 per cent to $831/tonne from $1,080 a year ago.
Though the season began with a 20 per cent drop in October 2024 to $977/tonne from $1,226 a year ago, prices have fallen 15 per cent in the last eight months.
“In 2007-08, the annual average basmati export price jumped over 53 per cent to $907/tonne. It crossed $1,000 for the first time the very next year.
“Since then, there’s been little variation, except in 2014-15 when the average rate exceeded $1,220/tonne,” said a veteran exporter.
Trade policy expert S Chandrasekaran stressed the need for deeper introspection into the second-generation basmati rice reforms.
policy reforms
“We must seriously deliberate how to accelerate, navigate, and benefit from the global market scaling while managing quality and authenticity,” he stated.
He said revisiting the current, quarter-century-old basmati rice export standards might be necessary.
According to Dinesh Chhatra, COO of GRM Overseas, last year’s high demand, driven by the Russia-Ukraine war, significantly boosted prices of the aromatic rice.
However, despite robust buying this year due to anticipated similar demand, prices are now depressed. This is largely because of last year’s bumper kharif output.
While some experts advocate maintaining a price standard for Indian basmati, Chhatra believes retaining an MEP could have reduced export volumes.
He noted that some basmati consignments sold well above the average rate. The government removed the $950/tonne MEP on basmati rice in September last year, following exporters’ requests for a reduction.
Official data show basmati export volume jumped 16 per cent to 3.99 million tonnes (mt) during October 2024-April 2025, up from 3.43 mt a year ago.
Basmati remains one of India’s top three agri-export items over the past few decades.