India's competitive pricing boosts rice exports to Malaysia

India's re-entry into the global rice market following the lifting of its ban has enabled it to secure a substantial market share in Malaysia, primarily driven by its competitive pricing, market sources told Platts, part of S&P Global Commodity Insights, on May 1.

The competitive pricing of Indian white rice has boosted purchases, however. Bernas, Malaysia's state buyer, uses staggered buying and holds a limited market share, sources said. This is unlikely to significantly influence rice price movements in Pakistan and India.

According to the Department of Statistics Malaysia, Pakistan was the top supplier to Malaysia in January 2025 with a market share of 40.32% at 38,566.6 mt. However, this marked a substantial decline of 45.8% compared to January of the previous year. In contrast, India exported 19,876.3 mt rice to Malaysia in January, up 22% year over year, with its export share rising to 20.78% from 11.61% in the year ago period.

Meanwhile, the Foreign Agricultural Service of the US Department of Agriculture has forecast that Malaysia's imports are likely to rise by 3.24% year over year to 1.75 million mt in the marketing year 2024-25 (January-December).

This rise is driven by declining global prices. As rice prices have been falling since 2024 and are expected to stay low in 2025, importers are likely to boost trade to meet rising consumption demand and pad stocks.

"Bernas gets the highest supply of 5% broken imported white rice from Vietnam, India, and Pakistan. Industry stakeholders claim not to face significant barriers in obtaining rice, and moving around the origin country as needed, thus price is a significant factor in where imported rice in Malaysia originates," the USDA said in a report released on April 23.

India is the cheapest supplier of white rice, with Platts assessing India WR 5% at $376/mt FOB April 30, up $15/mt month over month, while Pakistani WR was assessed at $387/mt, down $7/mt over the same period. Vietnamese WR 5% was assessed at $399/mt FOB, up $9/mt and Myanmar WR 5% at $377/mt, down $8/mt month over month. Thailand WR 5% was assessed at $406/mt FOB, up $8/mt month over month.

When it comes to imported rice, consumers from Peninsular Malaysia prefer white rice with a harder texture, generally from India and Pakistan, compared to consumers in Borneo, who prefer softer-textured white rice from Vietnam, the USDA report said.

India's exports to Malaysia rise

Bernas was not very active in the Indian rice market before the ban. However, after importing rice through NCEL during the non-basmati white rice ban and being satisfied with the quality, they began actively buying from India following the relaxation of restrictions in September 2024. "While their traditional markets are Vietnam, Thailand and Pakistan, one reason why they are buying more from India, apart from low Indian WR prices, is risk diversification," said an India-based exporter. Bernas prefers to buy WR 5% basis broken from India, the exporter added.

During October 2024 to January 2025, India exported 104,173.70 mt of rice to Malaysia, up 33% in the same period previous year when it exported 78,125.62 mt, according to Agricultural & Processed Food Products Export Development Authority.

Sources also indicated that Bernas prefers to buy in containers rather than in bulk, as it is easier for them to handle. Their imports from India are expected to continue once the crops from Pakistan and Vietnam are finished.

"Bernas' imports from India have been notably higher than their original buying, primarily due to attractive pricing and acceptable quality. Additionally, the almost zero-cost container freight from Chennai to Malaysia serves as a further advantage," said Rajesh Paharia, Chief Manager, Business Development, Kribhco Agri.

"Rice continues to be the primary carbohydrate source in Malaysia, with the USDA projecting consumption to reach 3.25 million mt in the MY 2025-26. This reflects a 2% year-over-year increase, which is consistent with the expected annual population growth of 2% in the country."

Minimal impact on rice prices in India, Pakistan

Some exporters from Pakistan and India, two major suppliers for Malaysia's state procurement agency, do not expect Bernas' purchases to significantly boost the WR market due to weak international demand, which has been affected by the absence of large players such as Bulog, Indonesia's state procurement agency.

"The current demand for white rice is exceptionally weak. However, the market has the potential to shift if large-scale buyers like Bulog, the Philippines, China, or African nations enter the scene," an Indian trader said. "While Bernas is one of the major buyers, their market share is limited, and their strategic purchases throughout the season are typically modest, ranging from 40,000 to 50,000 mt at a time, which won't substantially impact Indian market prices for WR."

According to Pakistani sources, Bernas' staggered buying strategy is unlikely to lead to any significant movement in market prices.

"Bernas spread the purchases. They are happy with Pakistani products, and exporters will be more than happy to take any of the Bernas business," a Karachi-based trader said. "Does it affect the market much? Not really, as sales are generally kept very quiet by both Bernas and the Sellers. Bernas buys shipments 2-4 months ahead. No urgency lessens the effect on the market," the trader added.

The USDA has also forecast a 5% year-over-year rise in milled rice production for Malaysia at 1.58 million mt for MY 2024-25. This increase has been attributed to improved seed varieties, better milling efficiency, and government incentives such as increased floor prices and subsidies.

Looking ahead, India's rice exports to Malaysia are likely to strengthen as Bernas continues to seek competitive pricing and quality. With the USDA forecasting an increase in Malaysia's rice imports, Indian suppliers may experience sustained demand, while other major rice origins, such as Thailand, Vietnam, and Pakistan, will face strong competition from India.