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Rice exports for FY20 may fall; Geo-political situations, tighter trade norms, higher MSP to blame

Rice exports, global markets, Drip Capital, Indian export basket, CAGR, annual exports, trade norms, Basmati riceRice being a kharif crop (August– November) shows a clear seasonal pattern in exports as well.

India’s rice exports for FY20 are expected to fall due to geo-political situations, tighter trade norms and higher MSP of the commodity by the government, says a report by US-based trade finance company Drip Capital. India is the world’s largest rice exporter with over 25% share in global markets.


The report states that within the Indian export basket, rice contributes to over 2% of overall exports. The sector reported a CAGR of 14% between FY2010 to FY2019. However, rice exports this year have seen a decline across the globe with a major dip coming from the Middle East due to heightened geo-political tensions. A resulting fall in prices has further aggravated the sector’s woes.

Pushkar Mukewar, co-founder and co-CEO, Drip Capital said, “YTD exports so far are looking bleak with Iran, the biggest export market, seeing a 22% fall in shipments. Other export markets like the UAE (33%), Nepal (23%), Yemen (2%), Senegal (90%) and Bangladesh (94%) have also seen a fall in rice shipments from India. On the other hand, exports to certain nations broke the trend from past to post growth, such as Saudi Arabia (4%), Iraq (10%), Benin (8%) and the USA (4%).”


The report adds that Haryana is the top Basmati rice exporting state in the country with a CAGR of 3% between FY16-19, shipping $ 2,410 million worth of the commodity in FY19 alone. Gujarat is second with shipments worth $1,106 million in FY19, with an impressive CAGR of 47% over FY16-19. Other major contributing states are Delhi, West Bengal and Andhra Pradesh.

Rice being a kharif crop (August– November) shows a clear seasonal pattern in exports as well. The four months post-harvest (December–March) see over 40% of annual exports as compared to the rest of the year. The current year’s (FY19-20) rice exports have also been trending much below previous years’ performance, the report said.

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