India, the world’s largest rice exporter, which is responsible for roughly 40% of global rice exports. Now, it has called for a massive downward revision of its previous growth projection for these exports. The Rice Exporters Association recently raised the revision high for the expected growth in 2025. They’ve backed down from their original lofty ambitions of 25% to just 11%. This amendment leads to the anticipated export capacity of around 20 million tons. That’s down from an earlier forecast of 22.5 million tons.
The statement was made by B.V. Krishna Rao, president of India’s Rice Exporters Association, in an interview with Nikkei Asia. The decision underscores the difficult circumstances that Indian exporters are facing at this time. Thus they are in a very vulnerable position, as are their peers in Thailand and Vietnam. The market is being impacted by difficulties related to a rice oversupply. This oversupply has resulted in a precipitous fall in prices.
These moves came after India lifted a spate of export curbs earlier this year. This decision caused a wave of Indian rice inundating global markets, which has helped create the oversupply we currently see. Consequently, prices have dropped, hurting the profitability of exporters. This trend is not limited to India. Exporters in Thailand and Vietnam are facing similar pressures as the rice market navigates a large surplus supply.
The revised forecast underscores the ongoing volatility in the rice market and highlights the precarious balance between supply and demand. India remains very influential in the world rice trade. With newer destructive market dynamics, exporters are being forced to reconsider their tactics and recalibrate their growth projections.