Basmati Rice Market – Global Industry Analysis

Basmati Rice Market

The increasing demand for rice is one of the factors that are driving the global basmati rice
market. The increase in population has led to the rise in demand for food, which in turn is
driving the basmati rice market.

Rice is one of the most important staple foods across the globe. It is not only consumed by
people in developing countries, but also people in developed countries consume rice. Rice
accounts for 20% of all calories consumed by humans worldwide.

The global basmati rice market can be divided based on sales channel, region, and product
type. Based on the sales channel, the global basmati rice market can be bifurcated into
modern trade and traditional trade. The modern trade segment constitutes supermarkets,
hypermarkets, and retail stores. Traditional trade includes grocery stores, mom-and-pop
stores, convenience stores, and others. In terms of region, the global basmati rice market
can be segmented into Asia Pacific, Europe, North America, Latin America, and Middle East
& Africa.

Based on product type, the global basmati rice market can be classified into aromatic and
non-aromatic. Aromatic basmati rice includes 1121 basmati rice and others such as Pusa
Basmati Rice and Sug

Export of basmati rice from India

India is the largest exporter of basmati rice to the world. The production of basmati rice in
India is concentrated in Punjab and Haryana, as these two states have the best soil and
climatic conditions for growing this aromatic rice.

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The export of basmati rice from India has been increasing steadily over the years. However,
there was a sudden dip in exports in 2008-09 due to the global financial crisis. The exports
bounced back sharply in 2010-11 and 2011-12.

The recent trend shows that basmati rice exports from India have been increasing at a faster pace compared to non-basmati rice exports from India.

The export of basmati rice is governed by the Agricultural and Processed Food Products
Export Development Authority (APEDA). The government of India fixes the minimum support price for basmati rice. All exporters must comply with Indian government rules and
regulations and get an export license from APEDA.

The main countries to which India exports its basmati rice are Saudi Arabia, Iran, Kuwait,
Iraq, U.A.E., the U.K., the U.S., Canada, Russia, and Germany. India accounts for 60% of
the world’s total basmati rice export market share. Pakistan accounts for 30%. India has
exported 10.13 million tonnes of basmati rice in the last financial year, up from 9.85 million
tonnes a year before, according to the Agricultural and Processed Food Products Export
Development Authority (APEDA).

Though there has been a marginal increase in exports in quantity terms, the value of exports has declined to $4.37 billion from $4.68 billion a year ago. Though India’s share in the global basmati rice trade has risen marginally to nearly 50 percent from 48 percent, it will not be long before Pakistan takes the lead with its new varieties of basmati that have higher aromatic qualities and longer grain length, according to traders here. Pakistan’s basmati rice production is estimated to have gone up by 5-6 percent over the previous year at 2.5 million tonnes against India’s 2.3-2.4 million tonnes.

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Basmati rice Industry – overview

Basmati rice is one of the popular varieties of rice, which is consumed all over the world.
Basmati rice is mainly grown in the Indian sub-continent. In India, it is largely considered a
luxury product. It is highly exported to many other countries. However, there has been a
sharp increase in the number of basmati rice exporters in India.

It has been estimated that India alone accounts for approximately 75% share of global
Indian basmati rice production. Basmati rice crop contributes about 20% share to Indian
total paddy production and its acreage under cultivation is 7% of the total cropped area in
India. Out of the total basmati production, nearly 80% of basmati rice is exported from India.

The basmati rice industry in India has witnessed significant growth over the past few years
and is also expected to grow in the future due to higher demand from key export markets
such as UAE, Iran, and Saudi Arabia.

India exports nearly 5 million tonnes (MT) of basmati rice annually and earns more than US$ 3 billion*. The country’s basmati rice export to UAE alone accounts for nearly 36% share** with Iran accounting for 31%.

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