- Export restrictions, weak logistics undermine competitiveness
- Structural challenges, inconsistent quality standards weigh on trade
The global rice trade, long driven by South and Southeast Asia’s dominant exporters, is showing signs of strain. Record harvests have done little to boost shipments, as a series of regulatory missteps and logistical inefficiencies have chipped away at market confidence.
In South Asia, one of the world’s top rice exporters has seen a steep fall in overseas sales despite healthy production levels. Basmati exports are down nearly 45% y-o-y, while non-basmati shipments have dropped over 20%, according to industry estimates. The decline underscores how unstable trade policies and poor coordination between agencies can cripple export momentum even when output remains strong.
Policy reversals erode buyer confidence
Export curbs, originally imposed to safeguard domestic supplies, have become a double-edged sword. Frequent duty changes, minimum export prices, and sudden policy rollbacks have unsettled global buyers and complicated forward contracts.
In September 2024, the Indian government slashed the export duty on parboiled rice from 20% to 10% to ease inventory pressure. Weeks later, it scrapped the floor price on non-basmati white rice. While these moves aimed to revive trade, they instead highlighted the lack of policy consistency. Importers, wary of abrupt reversals, turned to competitors such as Thailand, Vietnam, and Myanmar for a stable long-term supply.
The result: once-dominant Indian exporters are now struggling to regain lost market share in traditional destinations across Africa and the Middle East.
Logistics, quality bottlenecks deepen the slump
Policy turbulence is compounded by operational challenges. Ageing milling infrastructure, high inland freight costs, and delays at congested ports are inflating logistics expenses and eroding price competitiveness.
Official data show rice stocks in Indian government warehouses surged to a record 44 million tonnes (mnt) by December 2024 — almost six times the buffer requirement. Oversupply has led to prolonged storage, higher spoilage risk, and increased carrying costs. For exporters, this translates into lower margins and sluggish cash flow cycles.
Millers also report inconsistent quality checks and moisture-level disputes, particularly in humid harvest regions, which slow down procurement and damage exporter credibility.
Global prices slide, shifting buyer preference
The structural weaknesses at home coincide with a softening international market. Benchmark Thai 5% broken white rice has fallen nearly 25% since early 2025 to around USD 372/tonne (t), as abundant supply from Southeast Asia pressures prices. Major importers in Africa and Asia are deferring purchases or negotiating lower premiums.
Countries with stable trade regimes are capturing this opportunity. Thailand and Vietnam, benefiting from efficient logistics and predictable export policies, have expanded their footprint in both premium and parboiled segments.
Course correction needed for recovery
Analysts say that to restore competitiveness, Indian exporters must address both policy and operational bottlenecks. Predictable export rules, transparent quality protocols, and improved port and transport infrastructure could help rebuild global trust.
Industry stakeholders also stress the need for better market intelligence and closer coordination between millers, traders, and regulators. Without such alignment, bumper harvests will continue to pile up in warehouses instead of reaching global markets.
The message is clear: production strength alone cannot drive exports. In an increasingly competitive rice market, credibility, consistency, and efficiency are the true currencies of trade.
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