Basmati rice exports from India reached 4.62 million tons in 2020-21, valued at $4 billion. It is expected that the rice exports from India will continue to dominate the world market this year as well, according to trade and industry experts. In total, Indian rice exports fetched around Rs 65,297 crore in 2020-21, which is quite an impressive amount.
In the last 20 months, India has emerged to be a global player in rice export. This has been partly due to the lockdown situation because of which other nations could not meet the world demand and India took the opportunity to export more rice globally.
Basmati Rice Production
Asia Pacific region is the largest producer of rice in the world, accounting for around 90 percent of the total rice production. China is the leading producer of rice followed by India.
Basmati rice however is specifically grown in India and Pakistan. India is responsible for around 70 percent of the total production globally. A small percentage of the total production in India is through organic means. In 2018, India’s production reached almost 5.03 million tons.
India is the world’s largest producer as well as exporter of basmati rice.
Basmati Rice Export from India
India is the leading basmati rice exporter, a trend that is being driven by growing demand from Iran and a steady increase in paddy prices for three years in a row. This growth has been possible despite a few hurdles that surfaced during 2019 such as the pesticide residue resulting in a decline in exports to the EU, payment issues from Iranian importers, and uncertainty over US trade sanctions on Iran.
The industry has been able to move forward and tide through these concerns, as is evident from a steady increase in exports to Saudi Arabia and the creation of the rupee payment mechanism to facilitate future trade between India and Iran.
In the last two years, India has emerged as a leading supplier to global markets contributing to food security in many countries in the scenario of nations stockpiling on food products anticipating logistical disruptions due to the forced lockdown. Other factors boosting exports are mentioned below.
India’s Focus on Expanding Port Handling Infrastructure
APEDA (Agricultural and Processed Food Products Export Development Authority) has been working closely with state governments and other concerned stakeholders to improve the port handling facilities at Kakinada, Vishakhapatnam, Chennai, Mundra and Krishnapatnam, and Paradip, thereby boosting exports.
Development of Value Chain Involving Key Stakeholders
APEDA has also been promoting basmati rice exports, with the setting up of the Basmati Export Development Foundation (BEDF) to sensitize farmers in the key growing regions about the adoption of good agricultural practices.
Top Ten Importers from India
The top ten countries importing Indian Basmati rice are mentioned below. In terms of volumes of export in 2020-21, these countries were responsible for around 80 percent of total shipments of aromatic long-grained rice from India.
- Saudi Arab
- Yemen Republic
The Middle East and Africa are significant consumers of this variety of rice. Together, these two regions account for 37.5% of the total consumption of the paddy crop. The rise in Indian exports of basmati rice is due to a steady increase in imports from Saudi Arabia and Iran.
Iran was the leading importer of grain from India between 2017-18. Algeria, Somalia, and Kenya are the major importing countries in Africa. Other significant consumers of Basmati rice are Europe and the US.
Basmati Rice Market Analysis
The global market for Basmati rice is expected to grow with a CAGR of 11.4% over the forecast period 2018-24, according to reports published by leading market research organizations. The key factors driving this demand are the following
- A unique taste
- Application of this rice variety in Middle Eastern cooking
- Increase in disposable incomes in major consuming nations
- Rich nutritional value of basmati rice and low-fat content
- An increase in population also acts as a catalyst for growth
Basmati is a variety of long, slender-grained aromatic rice traditionally grown in India, Nepal, and Pakistan. India accounted for as much as 65 percent of the total international trade in basmati rice in 2019, with its neighboring country Pakistan responsible for the remaining 35 percent. To be eligible to be labeled as Basmati, a rice variety needs to have a minimum average precooked milled rice length of 6.61 mm and average precooked milled rice breadth of up to 2 mm, according to the Indian Government Agency APEDA (Agricultural and Processed Food Products Export Development Authority).