India likely to lower open market sale scheme reserved rice price: sources

Indian exporters expect the government to lower the open market sale scheme reserved price for private parties, a change likely to exert downward pressure on local prices, sources told Platts Sept. 5.

The sources said pressure on local prices would boost exports, especially when rice prices in Thailand and Vietnam are cheaper than those in India.

A meeting with the Indian Millers' Confederation has been scheduled for Sept. 5 to discuss the proposal to reduce the OMSS reserved price for private parties, according to market participants.

"The new reserved price has been recommended today [Sept. 5] and the government is working on it," Mukesh Jain, president of the Rice Exporters Association of Chhattisgarh, said.

An exporter based in the Indian southwestern state of Karnataka said the government was likely to lower the price to Rupees 26,000/metric ton ($294/mt), while the initial proposal was to reduce it to Rupees 24,000/mt. "Amid an upcoming bumper crop, the government will have to offload the high inventory at an attractive price," the exporter said. "The current price of Rupees 28,000/mt is not viable as of now."

"This will bring down the local market by $10/mt in the next 15-20 days," the exporter said.

Currently, 25% white rice is being sold at Rupees 28,000/mt and above through OMSS tenders in Karnataka and Gujrat, according to the Value Junction portal.

The anticipated reduction in the OMSS price is expected to have a deflationary impact on local market prices, according to various sources.

"While spot market prices for white rice are high, if the reserved price is brought down to Rupees 24,000-26,000/mt, 5% WR can come down to $350/mt FOB levels for future shipments," a Delhi-based trader said.

The price pressure would affect all segments, the sources said, including PB 5%.

Platts, part of S&P Energy, assessed India white rice 5% STX at $371/mt on Sept. 5, $3/mt down month over month, while PB 5% was assessed at $344/mt FOB, $10/mt down month over month.

India is expected to export 24.5 million mt of rice in the 2025-26 marketing year (October-September), 2% higher year over year, according to Energy projections.