Basmati rice prices go up around 20%, non-basmati rates rise 25% amid raging US-Iran war: Report

For households already watching their kitchen budgets closely, rice is becoming more expensive, with both basmati and non-basmati varieties seeing sharp increases. Prices have risen as the US-Iran war pushes countries to secure food supplies, lifting global demand, while deficient rains in southern India have added to pressure in the domestic market, The Economic Times reported.

Basmati prices have risen 15-20% in the first quarter of FY27 from a year earlier, while non-basmati varieties are up 20-25%. Traders and exporters said prices are likely to remain firm until the new crop arrives in October-November, leaving little hope of immediate relief for consumers.

"Globally, all the countries are trying to secure their food supply. Rice being one of the major staples, they are buying aggressively. The Gulf countries are buying huge quantities of rice from India," Suraj Agarwal, CEO of RiceVilla group, a rice exporting and marketing firm, was quoted as saying by the publication. The rise in demand has pushed basmati rice, widely used in biryani, to around Rs 100 per kg in the first quarter of FY27, up from Rs 85 per kg in the same period last year.

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The increase has also spread to non-basmati varieties, adding to pressure on household budgets. Sona Masoori rice, which was priced at Rs 51-52 per kg last year, has risen to Rs 63-64 per kg. Agarwal said prices are unlikely to ease in the near term as the market remains stretched between strong demand and limited fresh supplies. "Prices are unlikely to come down any time soon. The US-Iran truce treaty is yet to happen, and the arrival of the kharif crop is almost two to three months away," Agarwal said.

The export market continues to support basmati prices. Akshay Gupta, head of bulk rice exports at KRBL Limited, said demand for Indian basmati remains strong, with India shipping a record 6.52 million tonnes in FY26 to 154 countries. Saudi Arabia remains the largest buyer, while enquiries from West Asia continue to stay high. However, payment and shipping disruptions along the Gulf corridor have slowed shipments, creating a backlog of demand rather than weakening buying interest.

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"The 2025 crop moved faster than anyone expected and there is very little carry-out going into the October arrivals. Domestic prices are being set by that tightness, not by exports," Gupta said. The domestic market is also under pressure from government procurement and uneven rainfall. BV Krishna Rao, president of the Rice Exporters Association, said government buying for public distribution has contributed to the rise in prices. In Telangana, the state government is supplying non-basmati rice through the PDS, while lower rainfall in Andhra Pradesh, Karnataka and Telangana has also kept prices firm, Rao added.

With the next kharif crop still weeks away, traders expect rice prices to remain elevated in the immediate term. Any meaningful correction is likely to depend on fresh crop arrivals, improvement in rainfall and a moderation in overseas buying. Until then, consumers are likely to continue bearing the impact of higher rice prices.