Basmati prices may soften soon amid Israel-Iran conflict
Pune: Prices of Basmati rice, which have increased by about 15-20% over the last two months due to a jump in exports, are likely to reduce in the coming weeks as exports to Iran are expected to decline due to its conflict with Israel.After prices of Indian Basmati rice dropped to ₹75-90/kg, major importing countries from West Asia and Iran had increased buying, causing prices to move up.Iran is the third largest buyer of Indian basmati rice after Saudi Arabia and Iraq, according, Agricultural and Processed Foods Export Development Agency (APEDA). In the 2024-25, India had exported basmati rice worth ₹6,374 crores to Iran, which accounted for 12.6% share of India's total basmati exports in 2024-25. "The export prices have come down from $950-1000/tonne about a month ago to $900-950/tonne," said Rajesh Jain Paharia, an exporter of Basmati rice."Prices have corrected, as freight is expected to go up due and transshipment issues," said Paharia.
Exporters said that the export volumes had declined for a few months since January. "Prices of Indian Basmati rice had reached their bottom by April as the global export demand was less due to multiple factors. However, export demand increased as everyone wanted to stock at low prices, bringing a surge in exports in May and a consequent increase in prices by about 15-20%," said Dhaval Shah, an exporter and domestic trader of Basmati rice in Maharashtra. "Although the prices are likely to remain stable for now, factors like the Trump effect or any escalation of the war will decide the future course of prices. Countries tend to buy more to ensure their food security if they see indications of escalation of war." Prem Garg, national president, Indian Rice Exporters Federation, said, "There are concerns about the shipments that are currently on the seas. There are also worries about payment dues."According to trade estimates, usually, the outstanding dues of Basmati trade with Iran stand at ₹1,000-1,200 crore. "In our trade with Iran, we take 20% advance payment and rest all is on 180 days credit," said Pahariya.
Exporters said that the export volumes had declined for a few months since January. "Prices of Indian Basmati rice had reached their bottom by April as the global export demand was less due to multiple factors. However, export demand increased as everyone wanted to stock at low prices, bringing a surge in exports in May and a consequent increase in prices by about 15-20%," said Dhaval Shah, an exporter and domestic trader of Basmati rice in Maharashtra. "Although the prices are likely to remain stable for now, factors like the Trump effect or any escalation of the war will decide the future course of prices. Countries tend to buy more to ensure their food security if they see indications of escalation of war." Prem Garg, national president, Indian Rice Exporters Federation, said, "There are concerns about the shipments that are currently on the seas. There are also worries about payment dues."According to trade estimates, usually, the outstanding dues of Basmati trade with Iran stand at ₹1,000-1,200 crore. "In our trade with Iran, we take 20% advance payment and rest all is on 180 days credit," said Pahariya.
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