A sharp 15-20% increase in non-basmati rice prices over the past month has created serious difficulties for exporters. Many exporters who had signed export contracts at lower prices are now facing losses, forcing some to default on their commitments. Rising freight costs, reports of rice shortages and a weak monsoon are expected to keep prices firm and could also affect government procurement.
A large volume of non-basmati rice meant for export is sourced from Chhattisgarh. Over the past month, the price of parboiled non-basmati rice has risen from Rs 2,800-2,900 per quintal to Rs 3,300-3,400 per quintal on a Free on Board (FOB) basis at Kakinada port. This sharp increase has put exporters who had finalised contracts at earlier prices under severe financial stress, with some already defaulting.
A leading rice exporter told Rural Voice that non-basmati rice is currently selling in the global market at $360-370 per tonne, making exports unviable at prevailing domestic prices. The steep rise in shipping charges has further turned non-basmati exports into a loss-making business. India exports a significant quantity of non-basmati rice to African countries, where freight rates for both bulk cargo and container shipments have increased sharply.
According to the same source, prices of non-basmati broken rice have also increased by nearly 20% during the past month, reaching Rs 2,650-2,700 per quintal. The government, however, has fixed the price of broken rice supplied from the central pool to ethanol producers at Rs 2,200-2,300 per quintal. Given the sharp rise in market prices, questions might arise about the feasibility of supplying rice for ethanol production at the notified rates.
Basmati rice prices have also increased during this period, though by a relatively modest 5%. However, exports have been severely affected by the Gulf conflict, particularly to key markets such as the United Arab Emirates, Saudi Arabia, Iran and Iraq, which are among India's largest destinations for basmati rice.
Most exporters do not maintain rice inventories in advance. Instead, they first secure export orders and then procure rice based on destination-specific packaging and labelling requirements. Under the current market conditions, exporters who signed contracts at lower prices are finding it difficult to procure rice at much higher market rates and execute those orders profitably.
Meanwhile, reports of rice shortages are also emerging. An official of Raipur-based BigMint Consultancy told Rural Voice, "I was in Dhamtari on Thursday, and there is a significant shortage of rice there. Due to the sharp rise in prices, exporters are finding it difficult to procure rice."
As per the government data, India achieved a record rice production in 2025-26, overtaking China. However, despite the bumper harvest, the sharp rise in prices and below-normal rainfall during the current southwest monsoon season have resulted in lower paddy acreage compared with last year, which is expected to adversely affect production.
Under these circumstances, higher rice prices could also impact government procurement during the Kharif Marketing Season (KMS) 2026-27, potentially leading to further increases in domestic rice prices. An official of a leading rice exporting company said that India's non-basmati rice exports are likely to decline this year compared with last year.