Product Profile- Basmati Rice
Basmati rice has been enjoying a premium position in the global marketplace, which has reflected greatly on the growth of the market for basmati rice across the world. Basmati rice, grown for many centuries in the Indian subcontinent, is known globally for its fragrance and its flavour.
The size of the global rice industry is approximately US$275 billion, of which, Basmati industry accounts for US$5.8 billion (2.1%). India accounts for around 72% of Basmati rice produced, while Pakistan accounts for 28%. Although Basmati represents a small part of India’s US$221 billion agriculture industry, it offers India, its leading producer, high product visibility in the world market.
The areas of basmati rice production in India are in the states of Punjab, Haryana, Himachal Pradesh, Delhi, Uttarakhand, Uttar Pradesh and Bihar; with Haryana being the major basmati rice cultivating state, producing more than 60% of the total basmati rice produced in India.
The worldwide market for basmati rice is anticipated to rise to US$17.74 bn by 2022, proliferating at a robust CAGR of 11.0% during the period from 2017 to 2022. The export demand for basmati rice is projected to improve further in the near future, adding considerably to the market’s growth.
India’s total rice export in 2017 amounted to US $7.1 billion, making it the largest exporter of rice. The export of Basmati rice has been continuously dominating India’s rice export basket. Last year, the export of Basmati rice accounted for more than 50% of the export share, valued at US $3.8 billion.
The top export destination for Indian Basmati Rice last year was Iran, which imported US $ 831.8 million worth of the product last year. This was followed by Saudi Arabia and Iraq.
Region wise, Middle East was the top importer of the Indian Basmati, having a share of more than 60% in the total Indian export.
Across several parts of the world, rising disposable income is benefiting the basmati rice market. Consumers are increasingly spending liberally on premium quality grains, lentils and spices for a fulfilling eating experience. Basmati rice is increasingly becoming the choice across consumer groups mainly because of its superior taste and aroma that is highly pleasing to the senses. This gives India huge potential of exporting Basmati rice around the world.
On the flip side though, high price of basmati rice over other rice variants is a key challenge to the market’s growth. Basmati rice remains a premium grain not affordable by the average consumer. In addition, increasing awareness about health ill-effects of consuming polished rice on an everyday basis is leading consumers to switch to unpolished rice varieties. This is challenging the growth of basmati rice market to some extent.