Factors affecting Indian Basmati Rice Price Trends

Added on June 16, 2015 under Facts & Resources

Rice FieldsThe Indian Basmati Rice market is generally stable in terms of prices but for last few years the prices keep fluctuating. The reason for fluctuation of rice depends on many factors which could be domestic as well as international in nature. The past trends shows that fluctuating prices of rice are not good for the rice industry as a whole, and it hampers the Indian rice trade at all level from farmer to millers/exporters, miller to traders, traders to end consumer.

 

Indian is one of the largest rice producing and exporting nations in the world and assessment of all the reasons leading to fluctuation of Indian basmati and non-basmati rice prices is not easy as rumors and speculations can not be denied in any commodity which is a subject to international trade. Also we can not forget that rice is a staple food for many countries and in India it plays major role in agriculture produce too.

 

Few of the domestic factors which may affect the Indian rice pricing are:

 

  1. Overall Production of Basmati and Non-Basmati Rice in India which further depends on seasonal Monsoon across Indian states.
  2. Price of Rice Paddy and ratio of full and broken kernels in milling the paddy.
  3. Domestic demands from Indian consumers.
  4. Rice Tenders floated by Food Corporation of India and other government organizations.
  5. Any state and central government policies concerning domestic rice trade or rice export.

 

Few of the international factors which may affect the Indian rice pricing are:

 

  1. The international orders and global tenders for procurement of basmati and non-basmati rice.
  2. Appreciattion / depriciation of USD or USD V. INR conversion ratio.
  3. Increase / decrease Rice crops production in other rice producing nations.
  4. Crude prices may or may not indirectly affect the pricing.
  5. Indian government policies (i.e. MEP – Minimum Export Price), or ban on export of non basmati and basmati rice.