Basmati rice has been cultivated in India for over 4000 years and exported to the rest of the world due to its distinctive taste and quality. The Basmati rice market has seen immense growth, owing to growing demand from countries such as China, the Middle East, and European countries. The Indian government plays an important role in regulating the production of Basmati rice and in turn, affects the price of this commodity in the global market. In this article, we have discussed some of the top factors that have influenced basmati rice prices worldwide over the past five years.
Supply and Demand
It’s common knowledge that supply and demand directly affect rice prices in India. When there’s a drought in one of our major growing regions. Such as in West Bengal, prices jump up as a result. But supply and demand aren’t just about production; it also has to do with global demand for rice exports. If China starts importing large amounts of rice from India, prices go up for Indians who are buying rice in bulk. This market-based system of determining price is helpful to have a grasp on when you’re talking about basmati rice importers from India.
Local Weather Conditions
India alone produces over half of all rice grown on Earth. When it comes to exporting rice, weather conditions are a significant factor. Rice that’s harvested during dry spells can spoil before being sold or shipped because the rice needs to be stored underwater during transportation to prevent exposure to air and humidity. Heat waves in June also lower production potential because they cause water levels in rice paddies and paddy fields to fall below optimum levels. When coupled with early monsoon rain, harvesting basmati rice can be significantly delayed until September or October when soil moisture levels return to normal after seasonal rains bring relief from high temperatures.
Today, most rice importers and exporters in India must adhere to government policies regarding buying and selling of rice. According to a regulation issued by the Indian commerce ministry on April 15, 2016, all licensed rice importers in India have been informed that they are required to buy only genuine 100 percent Indian basmati rice. A few days after China banned exports of raw materials needed for the production of fentanyl (an opioid painkiller). India was on high alert for illicit drug shipments due to its status as one of China’s biggest customers for synthetic drugs.
Asia has always been a prominent exporter of rice, and India has been no exception. However, between 2017 and 2018 there have been several political factors that have affected exports from India. Aside from a few exceptions in 2011 and 2012, since 2008 India has suffered a continuous decline in its export revenue due to stagnant exports of all rice types except non-basmati rice. In October 2017, Indian Prime Minister Narendra Modi announced that his government will focus on reducing its dependence on cash crops and increasing its reliance on food crops to reduce its trade deficit.
Competition Between Exporters
One of several factors that have a significant impact on basmati rice prices is competition between exporters. Larger companies can afford to offer lower prices than smaller, less-established businesses. When there’s a large gap in price between top exporters and other, smaller businesses, sellers will consider buying from larger companies instead of low-cost suppliers. If you are looking for high-quality basmati rice at affordable prices, it’s important to compare the company’s credentials and reputation. Read customer reviews before making any purchases. However, Tradologie.com is the ideal platform to buy rice online. The platform is the world’s first next-generation digital trade platform where buyers and sellers connect directly to trade in agri-commodities and food products. It has 575,000+ verified buyers and 60,000+ verified sellers.
Basmati Rice Demand Globally
According to a new report by Allied Market Research. This growth is mainly driven by the increasing per capita income in the Middle East. North Africa, and South Asia regions. It accounts for more than half of total global basmati rice production. In 2015, this region accounted for nearly two-thirds of the total global production of basmati rice (57%). India and Pakistan are among the largest producers of basmati rice in the Asia-Pacific region. China has emerged as one of the leading exporters of basmati. Rice in recent years due to its high production capacity and quality standards.
The Middle East & North Africa (MENA) region is expected to be the fastest-growing market for basmati rice over the next five years due to increasing per capita income levels in GCC countries (Saudi Arabia, UAE, Kuwait). These countries consume high volumes of spices, which include basmati rice.
Rice Importers From India
India is one of the leading exporters of white rice in the world. And has a large domestic market for its agricultural products. The country produces about 40% of its own requirement.
The Indian government has been working hard to increase its rice export capacity to meet international demand for quality rice. In order to achieve this objective. It has taken several steps such as increasing its production through irrigation projects and Improving access to technology. And creating a conducive environment for growth in the agriculture sector. Which will help increase productivity in the agriculture sector and reduce dependence on imports.
Rice importation by India into the US increased by 11% during the 2015-2016 financial year compared with the previous year. The total volume imported was 12 million MTs during this period. With an estimated growth rate of 10% annually due to higher demand from both domestic as well as international markets.
According to industry experts, that has to do with the growing middle class in developing countries like India and China. These people will have more discretionary income and so more money to spend on basmati rice and other delicacies. That’s where these ever-increasing demands are coming from people in developing countries. Who wants the same high-quality food that Westerners enjoy.