Intense rainfall and widespread flooding in the basmati rice-producing areas of India and Pakistan have sparked concerns over the output of this premium staple, leading to a surge in prices as supply forecasts decline.
India and Pakistan are the sole producers of aromatic basmati rice, which fetches nearly double the price of standard varieties and is heavily imported by the UK, Middle East, and USA.
While floods have significantly impacted the basmati rice harvest, with water levels now decreasing, losses are anticipated to be limited unless further rainfall occurs, stated Nitin Gupta, senior vice president at Olam Agri India.
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Northern Indian states Punjab and Haryana produce over 80% of the country’s basmati rice, while Pakistan’s Punjab province accounts for over 90% of its production.
Late August and early September’s heavy rains caused the Ravi, Chenab, Sutlej, and Beas rivers to overflow, inundating these regions.
Preliminary evaluations suggest that crops like paddy, cotton, and pulses over nearly one million hectares in Punjab and Haryana have been affected, said an Indian government official.
In Pakistan’s Punjab, thousands of hectares of rice, sugarcane, corn, vegetables, and cotton were submerged earlier this month.
The floods have severely impacted farmers just as crops such as basmati rice and cotton neared harvest, noted Ibrahim Shafiq, export manager at Latif Rice Mills Pvt Ltd.
In both countries, paddy seedlings are typically transplanted in June–July, with the harvest commencing in late September.
The industry anticipated a record crop, but damage is expected to curtail supplies and elevate basmati rice prices, Shafiq added.
“Conservative estimates suggest a 20% damage to Pakistan’s basmati rice…This will inevitably escalate basmati rice prices in both local and international markets,” Shafiq remarked.
Traders have increased prices by $50 per ton in the past week, with potential for further rises if supply shortages persist at harvest’s end, said Gupta of Olam.
However, certain industry officials, including Karachi-based Chela Ram Kewlani, believe the current price hike is temporarily driven by crop damage reports and should stabilize once new season supplies arrive.
