- Damage to standing paddy estimated at 1.92 lakh hectares
- Basmati production may fall 20-25% amid delayed arrivals
Severe floods across Punjab have inundated large tracts of farmland in India, damaging nearly 1.92 lakh hectares of standing crops. Early assessments indicate that paddy accounts for almost 85% of the crop losses, with basmati and non-basmati varieties equally exposed. Cotton fields have also been affected, but rice remains the hardest hit. According to the Indian Rice Exporters Federation, about 1.5 lakh acres of basmati and non-basmati rice are under stress, raising expectations of a 20-25% drop in basmati production this year.
Farmer losses, compensation gap
Compensation measures announced by the state, including INR 20,000 per acre, are unlikely to cover the full extent of losses. Farmers estimate actual costs for paddy cultivation, including inputs and family labour, at nearly INR 27,830 per acre. The gap between real losses and government aid has raised concerns over farmer incomes, particularly in districts where repeated flooding has left fields covered with silt and standing water.
Impact on rabi season
Beyond the immediate damage to the kharif crop, delays in draining waterlogged fields pose a significant risk to the rabi season. Farmers may struggle to re-sow or prepare land in time for wheat and other winter crops. Missing the optimal sowing window could reduce yields further, compounding supply challenges. Analysts warn that lingering wet conditions may have a cascading effect on overall agricultural productivity in Punjab this year.
Strain on exports
The supply shock comes at a time when India’s rice exports face strong competition. Market arrivals of paddy in September are expected to remain thin, with exporters already signalling disruptions for October and November shipments. Traders note that buyers are turning cautious, as Indian 5% broken white rice remains priced higher than what Thai and Myanmar offer. While India’s basmati segment typically enjoys strong demand in West Asia and Europe, lower output may limit exportable surplus and push up prices in the coming months.
Parallel crisis in Pakistan
Adding to regional uncertainty, Pakistan’s Punjab province has also been hit by floods, threatening one of the country’s key rice belts. While Sindh, the second-largest producer, has so far been spared, traders warn that downstream flooding could damage crops there as well. Pakistan’s export commitments are already under strain, with shipments delayed and exporters sourcing cargoes from Myanmar to meet contracts. A market consultant projects Pakistan’s rice output for 2025-26 at 9.35 million tonnes (mnt), down 3.8% y-o-y, with exports forecast to fall 9% to 5.2 mnt.
Outlook
The full extent of crop losses in India will only become clear once waters recede, but early indications point to a sharp contraction in both basmati and non-basmati rice supply from Punjab. With the state contributing a significant share to India’s rice basket, reduced availability could tighten the domestic balance sheet and push export prices higher. At the same time, increased competition from Thailand and Myanmar may cap India’s ability to pass on higher prices to overseas buyers. The interplay of weather shocks, farmer distress, and shifting trade dynamics will determine how severely the floods reshape India’s rice market in the 2025 marketing year.
Leave a Reply