7 Reasons Why India is the Biggest Exporter of Rice in the World

Rice is one of the most important staple foods for more than half of the world’s population, especially in Asia and Africa. According to the Food and Agriculture Organization (FAO), rice production reached 769.5 million tons in 2020, and global rice trade amounted to 47.4 million tons in 2021. Among the rice-producing and exporting countries, India stands out as the leader, accounting for 36.8% of total rice exports in 2022, followed by Thailand (13.5%), Vietnam (8.6%), Pakistan (8%) and the United States (5.8%).

But what makes India the biggest exporter of rice in the world? Here are seven reasons why India has a competitive edge in the global rice market.

1. Diverse agro-climatic conditions

India has a wide range of climatic zones, from tropical to temperate, that allow it to grow different varieties of rice throughout the year. India produces both long-grain and short-grain rice, as well as aromatic Basmati rice, which is highly valued in international markets. India also grows hybrid and genetically modified rice varieties that have higher yields and resistance to pests and diseases.

2. Large area under cultivation

India has the largest area under rice cultivation in the world, with about 44 million hectares in 2020, according to FAO. This accounts for almost 30% of the global rice area. Rice is grown in almost all states of India, but the major producing states are West Bengal, Uttar Pradesh, Punjab, Andhra Pradesh, Bihar and Tamil Nadu.

3. High production and productivity

India is also the second-largest producer of rice in the world, after China, with an output of 120.3 million tons in 2020, according to FAO. India’s rice productivity has improved significantly over the years, thanks to the adoption of improved seeds, irrigation, fertilizers, pesticides and mechanization. India’s average rice yield was 4.3 tons per hectare in 2020, compared to 2 tons per hectare in 1960.

4. Government policies and support

The Indian government plays an active role in supporting and regulating the rice sector, through various policies and programs. Some of these include:

The Minimum Support Price (MSP), which guarantees a minimum price for farmers’ produce and ensures their income security.
The Public Distribution System (PDS), which procures rice from farmers at MSP and distributes it to poor consumers at subsidized rates.
The Food Corporation of India (FCI), which manages the procurement, storage and distribution of rice for PDS and other welfare schemes.
The National Food Security Act (NFSA), which provides legal entitlement to food grains for 75% of the rural population and 50% of the urban population.
The Pradhan Mantri Kisan Samman Nidhi (PM-KISAN), which provides direct income support of Rs 6,000 per year to small and marginal farmers.
The Pradhan Mantri Fasal Bima Yojana (PMFBY), which provides crop insurance to farmers against natural calamities and crop failures.
The Rashtriya Krishi Vikas Yojana (RKVY), which provides funds to states for enhancing agricultural growth and development.

5. Competitive prices

India’s rice exports are competitive in terms of price, quality and variety. India’s average export price of non-Basmati white rice was $372 per ton in 2022, compared to $433 per ton for Thailand, $483 per ton for Vietnam and $544 per ton for Pakistan, according to Statista. India’s Basmati rice exports fetched an average price of $1,099 per ton in 2022, higher than any other country’s aromatic rice exports.

6. Strong demand from importing countries

India’s rice exports have been driven by strong demand from importing countries, especially in Africa, Asia and the Middle East. According to Statista, some of the largest buyers of Indian non-Basmati rice in 2022 were Bangladesh (3 million tons), Nepal (1.6 million tons), Benin (1.4 million tons), Senegal (1 million tons) and Nigeria (0.9 million tons). Some of the main customers of Indian Basmati rice in 2022 were Iran (1.4 million tons), Saudi Arabia (0.8 million tons), Iraq (0.7 million tons), United Arab Emirates (0.6 million tons) and Kuwait (0.3 million tons).

7. Resilience to shocks

India’s rice sector has shown remarkable resilience to shocks such as droughts, floods, pests, diseases and market fluctuations. Despite the challenges posed by the COVID-19 pandemic, India’s rice production and exports remained robust in 2020 and 2021, thanks to timely interventions by the government and the private sector. India also benefited from the export restrictions imposed by some of its competitors, such as Vietnam and Cambodia, which created a supply gap in the global market.

How Rice Exports Are Changing the Global Market

Rice is one of the most consumed staple foods in the world, especially in Asia and Africa. It is also a major commodity in the global trade, with some countries exporting large quantities of rice to meet the demand of other regions. In this blog post, we will look at some of the latest trends and statistics on rice exports, and how they affect the global market and the environment.

India: The Largest Rice Exporter

According to Statista, India was the largest rice exporter in the world in 2022/2023, with a volume of 21.5 million metric tons. This accounted for about 36.8% of the total rice exports worldwide, worth US$10.8 billion. India mainly exports non-Basmati white rice, which is a low-quality variety that is cheaper and more affordable for many developing countries. India’s main customers are African countries, Bangladesh and Nepal.

India’s rice exports have increased by 11.9% since 2021, despite an irregular monsoon season that affected the domestic production and prices. The Indian government imposed an export ban on non-Basmati white rice in July 2022, to ensure food security and prevent inflation, but lifted it in September 2022, after assessing the crop situation. The export ban caused a surge in the global rice prices and a shortage of supply for some importing countries.

Thailand: The Second Largest Rice Exporter

Thailand was the second largest rice exporter in the world in 2022/2023, with a volume of 8.2 million metric tons. This accounted for about 13.5% of the total rice exports worldwide, worth US$4 billion. Thailand mainly exports high-quality varieties of rice, such as Jasmine and Hom Mali, which are aromatic and have a premium price in the international market. Thailand’s main customers are China, Indonesia, Philippines and Malaysia.

Thailand’s rice exports have increased by 18.1% since 2021, thanks to a favorable weather condition that boosted the domestic production and a strong demand from China and Southeast Asian countries. Thailand also benefited from the export ban imposed by India, as it was able to fill the gap in the global market and increase its market share. Thailand has been implementing various policies to support its rice sector, such as subsidies, price guarantees and quality standards.

Vietnam: The Third Largest Rice Exporter

Vietnam was the third largest rice exporter in the world in 2022/2023, with a volume of 6.5 million metric tons. This accounted for about 8.6% of the total rice exports worldwide, worth US$2.5 billion. Vietnam mainly exports medium- and long-grain white rice, which are suitable for many dishes and cuisines. Vietnam’s main customers are China, Philippines, Indonesia and Iraq.

Vietnam’s rice exports have decreased by 16.1% since 2021, due to a decline in the domestic production and a lower demand from some importing countries. Vietnam faced several challenges in its rice sector, such as droughts, floods, pests, diseases and salinity intrusion that affected the crop yield and quality. Vietnam also faced competition from other rice exporters, such as India, Thailand and Pakistan, that offered lower prices and higher quality.

The Impact of Rice Exports on the Global Market and the Environment

Rice exports play an important role in the global food security, as they provide a source of income for many farmers and a source of food for many consumers. However, rice exports also have some negative impacts on the global market and the environment.

One of the impacts is the volatility of the rice prices, which can affect both the producers and the consumers. Rice prices are influenced by many factors, such as weather conditions, supply and demand, trade policies, exchange rates and speculation. When rice prices are high, producers can benefit from higher profits, but consumers can suffer from higher costs and lower access to food. When rice prices are low, producers can suffer from lower incomes, but consumers can benefit from lower expenses and higher availability of food.

Another impact is the environmental degradation caused by intensive rice cultivation. Rice cultivation requires large amounts of water, land, fertilizer and pesticide, which can lead to water scarcity, soil erosion, nutrient depletion and pollution. Rice cultivation also emits greenhouse gases, such as methane and nitrous oxide, which contribute to global warming and climate change. According to a study by Nature Communications, rice cultivation accounts for 2.5% of the global greenhouse gas emissions from agriculture.

Rice exports are a significant part of the global trade, with some countries dominating the market and influencing the prices and the supply. Rice exports have various impacts on the global market and the environment, both positive and negative, depending on the perspective and the situation. Rice exports are expected to continue to grow in the future, as the demand for rice increases with the population growth and the dietary changes. Therefore, it is important to find ways to make rice exports more sustainable and resilient, such as improving the production efficiency, diversifying the export markets, enhancing the quality standards and reducing the environmental footprint.

References:

https://www.fao.org/faostat/en/#data/QCL/visualize

https://www.fao.org/faostat/en/#data/QCL

Rice Exports by Country 2022 – World’s Top Exports
Chart: The World’s Biggest Exporters of Rice | Statista
Thailand’s rice exports expected to increase by 30% in 2022 – The Thaiger
Vietnam’s rice exports fall sharply in first half of 2022 – VnExpress International
Rice Market – an overview | ScienceDirect Topics
Global greenhouse gas emissions from rice paddies | Nature Communications

http://www.fao.org/faostat/en/#data/QC

https://www.statista.com/statistics/255947/top-rice-exporting-countries-worldwide-2011/