Agri Commodities

Rice Trade in India: Prospects and Challenges

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Rice is the most important food grain in India. Rice accounts for 50% of India’s total food grain production.

Rice is the most important food grain in India. Rice accounts for 50% of India’s total food grain production. India is the largest producer of rice in the world, accounting for 20% of global rice production. Rice is grown in various states of India, but maximum production comes from West Bengal, Andhra Pradesh, and Uttar Pradesh.

In fact, rice is the staple food of two-thirds of the World’s population.

In this section, we’ll tell you how India became the largest producer of rice in the world and address some of the challenges involved with its rice trade. This section will also explore how it’s possible for India to be producing so many more rice crops than it can consume and put that shortfall to use as a trading commodity (or raw material) by rice traders.

There are many varieties of rice available in the market, basmati rice, organic basmati, Sona Masoori, white rice, etc.

In the domestic market, there are many varieties of rice available in the market, such as basmati rice, organic basmati rice, Sona Masoori, white rice, etc. Basmati is a premium variety of long grain aromatic rice produced only in India and Pakistan. In fact, it is one of the most prized foods globally. Rice forms staple food for more than half of the global population that lives in Asia and Africa. It holds an important place in their daily life as it not only has nutritional value but also plays a vital role in social and religious ceremonies.

According to the United Nations Food and Agriculture Organization (FAO), India is the largest producer of basmati rice in the world.

According to the United Nations Food and Agriculture Organization (FAO), India is the largest producer of basmati rice in the world. In 2019, India produced 44.51 million tons of rice, which accounted for around 19% of all rice produced globally. India’s share in global basmati production is around 4%.

Despite being a significant exporter of both non-basmati as well as basmati varieties, India imports both types of rice from other countries, especially Myanmar and Vietnam. As per FAO estimates, India was one of the top five producers and importers of both non-basmati and basmati varieties in 2019. In that year, it was also the largest exporter among other Asian countries producing non-basmati varieties.

India has been supplying non-basmati varieties like IR-8 to Sri Lanka and Bangladesh for decades at highly subsidized prices under various long-term agreements (LTA). Thus far, there have been no import restrictions imposed by these countries on Indian exports during periods when domestic supply falls short to meet domestic demand.

Around 3% of the world’s rice production is Basmati.

You may not have heard of Basmati rice before, but it’s actually the most popular kind of rice in the world (and definitely a favorite in Indian restaurants). Rice is one of the world’s leading food commodities, and it makes up a hefty portion of many people’s diets. Of all kinds of rice, Basmati accounts for only about 3%—but that little bit goes a long way!

India is the largest producer and exporter of Basmati rice, with more than 50% share of the global production. It has been growing at 7-8% per annum since 2010-11. Other countries that produce this much sought-after variety include Pakistan and Nepal. Certain states within India like Punjab, Haryana, and Uttar Pradesh account for more than 80% of production while they also consume nearly 40% domestically which shows how much Indians love their basmati!

The major states that produce Basmati are Punjab, Haryana, Uttar Pradesh, and Uttarakhand.

The major states that produce Basmati are Punjab, Haryana, Uttar Pradesh, and Uttarakhand. The other major rice-producing states are Assam, West Bengal, and Odisha. Rice is grown in more than 50 countries throughout the world but India is the leading producer and consumer of this important cereal crop. India produces around 105 million tonnes (mt) of rice annually which gives her a 21 percent share in the global production of 498 mt. India’s exports are mainly basmati rice varieties to southeast Asian countries while non-basmati varieties go to Bangladesh, Nepal, and African countries. Mostly, in these countries Tradologie.com is playing a vital role in buying rice online.

Basmati Rice is a key player in Indian export markets

It is important to note that India is the largest producer of basmati rice, with about 70% share in total basmati production. Basmati rice trade in India, however, is concentrated in a few states. The major producers are Punjab and Haryana, contributing almost 80% of the total basmati rice produced in India. A number of factors such as high-yielding varieties and favorable agro-climatic conditions have made these areas suitable for growing basmati rice.

Basmati Rice Production by State (2019/20)

As depicted above, Punjab and Haryana lead the way in this category. As a result of its quality characteristics, Basmati rice makes up a significant portion of Indian exports within the Rice sector. In fact, it constitutes around 75% to 82% of all Indian exports within this field!

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