India's non-basmati new crop rice faces tight supply on drought risk

Indian non-basmati new crop rice supply is likely to be tight in October-November because of low rainfall in South Indian states, several traders and exporters told Platts, part of S&P Global Energy, Oct. 12.

The government of the state of Andhra Pradesh, one of the biggest rice producers of the kharif season, declared an early drought on Oct. 1 across 21 districts.

"Due to 53.4% rainfall deficit recorded during the months of June-August, 2026, and the prevailing El Niño conditions, by taking into consideration the relevant drought indicators based on data available for the period from June to August, 2026, it is proposed to undertake early declaration of drought for kharif 2026," a memo from the state government released Oct. 1 said.

Kharif and rabi are the two main crop seasons in India. Kharif crops, also known as monsoon crops, are sown at the beginning of the rainy season, usually from July to October.

"New-crop paddy is expected to open above the minimum support price [in October-November] as there's already limited paddy on the ground level," Mukesh Jain, president of The Rice Exporters' Association Chhattisgarh, said Oct. 12.

Earlier this year, the central government hiked the MSP for the new season kharif paddy to 24,410 rupees/mt for the common grade, up from 23,690 rupees/mt earlier.

"Whatever paddy is available with the millers is for government procurement only. Mills are also expected to remain closed for approximately 15 days during the Diwali period, from Nov. 8 to Nov. 25. So, if buying activity increases, the export prices could go up," Jain added.

"Food security remains a major concern ... [across] all destinations. Wheat and corn may increasingly be substituted with rice amid potential supply disruptions from the Russia-Ukraine war. Andhra Pradesh's 21 districts are now declared under drought. As food security concerns grow, more countries may enter the market to secure supplies," Jain said.

An Andhra Pradesh exporter said Oct. 12 that there's a genuine shortage of rainfall in the state, which could lead to short production, leading to new crop paddy prices opening above the minimum support price.

However, the state of Chhattisgarh is expected to see a bumper crop, they added.

The India Parboiled 5% rice price has been on an uptrend since May 2026, after hitting $317/mt FOB Kakinada on May 17, with Platts assessing it at $378/mt FOB Kakinada on Oct. 12.

Meanwhile, a Benin-based buyer said Oct. 12 that they are waiting for official crop output numbers to assess the situation, as new crop prices are usually below current price levels.

India's rice production for marketing year 2026-27 (October-September) is estimated at 146 million mt, down 8 million mt year over year, amid the impact of El Niño, according to S&P Global Energy CERA.