India’s basmati paddy supply has effectively run out at every major northern trading centre. Arrivals at Haryana, Punjab, Uttar Pradesh, Rajasthan, and Uttarakhand are negligible. Punjab mills are bidding against each other for the small parcels still available. Once those are sold, there is nothing to replace them until new paddy arrives in October.
The production deficit from last year’s flood and waterlogging damage is around 40 to 42 percent across key northern states. That gap has not been offset by any subsequent supply event. Prices corrected from the April peak, as expected after a sharp run-up, but the correction has been orderly rather than accelerating. Karnal-based exporters re-entered the 1509 Sela and 1401 Steam market during the second week of May in sufficient volume to lift prices approximately $2.09 per quintal from the period’s lows.
Export demand remains genuinely constructive. Gulf and Qatar buyers are short. FY2025-26 basmati exports through February reached 6.07 million tonnes worth $5.27 billion, the equivalent of the entire prior year’s volume in eleven months. The Iran route has shown improving shipping confidence through May.
On the policy side, the government raised the paddy support price for 2026-27 by 3 percent on May 13, signalling intent to support kharif planting ahead of the June sowing window. APEDA’s announcement of an AI-based basmati paddy survey covering a much larger area than the verified geographical indication zone has sparked industry debate, with potential implications for quality standards, export labelling, and the premium Indian basmati commands internationally. The All-India Rice Exporters’ Association has recommended splitting the survey between verified zone cultivation and varieties grown outside the notified geography.
The trade view is that the correction since mid-April is a buying window rather than a warning sign. A meaningful crash is not supported by the supply math.
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