Surge in Rice Prices as India Rushes Exports to Bangladesh

Rice prices in India have experienced a significant increase, soaring by up to 14% in just two days. This sudden spike comes as traders expedite exports to Bangladesh, following its decision to permit duty-free import of 500,000 tonnes of rice.

Disruption in Domestic Supply
The rush to export has led to a temporary disruption in India's domestic rice supply, causing retail prices to rise across several key varieties. According to reports, the Swarna variety has seen prices jump from Rs 34 to Rs 39 per kg, with similar increases observed in Miniket, Ratna, and Sona Masoori varieties.

Strategic Moves by Traders

Traders from West Bengal, Uttar Pradesh, and southern India had advance knowledge of Bangladesh's plan to remove its 20% import duty on rice. This foresight allowed them to stockpile rice near the Petrapole-Benapole border, readying for immediate shipment once the duty removal was officially announced.

Impact on Bangladesh's Market

Bangladesh's decision to eliminate the import duty aims to stabilize its domestic rice market amidst high inflation. The country has faced a 16% price increase in FY25, necessitating the import of 13 lakh tonnes of rice to meet demand.

Healthy Stocks in India
Despite the surge in exports, India's rice reserves remain robust. Industry experts, including CK Rao from Andhra Pradesh and Keshab Kumar Halder of Halder Venture Limited, affirm that the Bangladeshi orders will bolster the Indian market, helping to counteract the recent global downturn in rice prices.