Rice prices cross Rs 100/kg: Why basmati is getting costlier 

Prices of basmati and non-basmati rice have risen sharply in recent months. Basmati prices jumped 15-20% in Q1 FY27 from a year earlier, while non-basmati varieties rose 20-25%.

Basmati now costs around Rs 100 per kg, up from about Rs 85 per kg a year ago.

But why are rice prices rising, and could they remain elevated through the festive season?

Akshay Gupta, head of bulk exports at KRBL, told Business Today TV that two factors have driven the sharp rise: a smaller crop and a sudden surge in overseas demand.

In Case You Missed It: 'Rice exporters likely to be hit hard': How US sanctions on Iran could hurt India

Why rice prices are rising

The commodity expert said the increase in basmati prices began as early as January.

The October-December 2025 crop was shorter than expected after early floods in Punjab and Haryana disrupted part of the crop, he said. "And then the overall quantity was actually less than what was required, which actually led to the increase in rice prices."

The second factor was the war in West Asia, which began in late February and early March. "Suddenly, the demand from international buyers just skyrocketed because of food security reasons. So that was one of the two factors which led to the increase in prices of rice this year," Gupta added.

Buyers in West Asia, particularly the Gulf, continue to show strong interest in Indian rice as countries seek to secure food supplies. Saudi Arabia remains India's biggest buyer. 

India exported a record 6.52 million tonnes of basmati rice to 154 countries in FY26.

Must read: India’s imports from China rise to $65.49 billion in April-August 2026-27

Will rice prices stay high?

Gupta expects the price trend to continue.

The new basmati crop has started arriving, but early prices are already higher than last year's opening levels.

"At least about I would say 20 percent higher is the paddy arrival prices for the 1509 paddy crop, which is just starting to arrive," he said, adding that the early signals from the new crop remain bullish. International demand also continues to support prices.

"Last year, India recorded an all-time high of basmati exports. 6.5 million tonnes was the overall export, an all-time high. And we see the current trend to continue because demand from international markets is already continuing."

The expert said there is no clear sign yet of demand weakening.

"We don't see any reduction in demand or any country holding off any shipments. Although freights are high, exchange rates are high, everything is high, and the demand continues. So, we see that the prices will continue in this trend."

What about the festive season?

The new basmati crop is only beginning to arrive, so prices have not stabilised yet.

Gupta said the current crop is the best indicator available for now. Its arrival prices are about 20% higher than last year.

"But this is still early. It's an early arrival. The arrivals will increase over time, so the prices have still not stabilised. But the early indication is that the market (arrival) is going to be higher compared to last year."

Non-basmati rice offers less clarity for now. Its crop is expected to start arriving from the middle to the end of October.

Why are rice exports being rerouted?

Strong global demand is also changing the way Indian rice is reaching overseas markets. Shipments to countries such as Jordan and Turkey have risen right-fold.

However, Gupta said the surge in shipments to newer markets such as Jordan and Turkey does not necessarily mean these countries have suddenly become major basmati consumers.

He said the eight-fold rise in exports to Jordan is largely linked to the disruption around the Strait of Hormuz. "This year, the surge of eight-fold is mainly signifying the rerouting of shipments because of the Hormuz issue. And these shipments of Jordan are mainly being used to fulfill the demand of Iraq."

Exports to Iraq have fallen by about 50%, he said, with some of that volume now being routed through Jordan. "There is obviously a demand shift as well because buyers and even exporters are looking to diversify markets because of disruption in this area."

Will new export markets last?

The commodity expert said some of the new demand could stay even after the current disruption ends. But he does not expect the unusually high demand seen last year to repeat in the same way.

Last year, the average price of basmati was about $870, making Indian rice attractive to international buyers.

"Last year was an unusual year. If you see the average price of basmati last year, it was at $870 dollars, which was very attractive for the international market. And that created a lot of new markets for basmati."

This year, however, higher prices could limit the uptake of basmati in some markets. Still, Gupta expects some of the new demand to remain.

Pakistan's pricing will also be an important factor. Last year, Pakistani basmati was more expensive than Indian basmati, giving India an advantage.

Gupta said that could change this year. "If the Pakistani prices of basmati are high, then again, India will continue with its quantities. But if Pakistan becomes competitive, then that quantity will go back to Pakistan. It is still early. We'll come to know everything by mid-November."