Rice prices rise amid lower expected production, inadequate rainfall, reduced fertilizer use

Rice prices have been rising in the domestic market amid expectations of lower production in the 2026-27 crop year (July-June), as inadequate rainfall and reduced fertiliser application are likely to affect yields from the paddy crop currently being harvested.

Intensifying El Niño, a periodic warming of sea surface temperatures that affects rainfall and temperature patterns, has added to concerns over the production outlook. Intensifying El Niño has added to concerns over the production outlook.

(HT PHOTO)Paddy prices in Kota, Rajasthan, have risen to ₹4,500-4,700 per quintal from ₹3,200-3,400 a year ago, according to mandi trader Aniket Mehta. Mehta attributed the higher prices to depleted carry-forward stocks and lower expected yields from the ongoing harvest.

He said inadequate rainfall had left farmers with insufficient water for the crop and also restricted fertiliser application. Higher fertiliser prices amid the Iran war had added to farmers’ costs, further affecting their ability to use inputs, he said.

Market experts and traders broadly expect yields to be lower this season, although the extent of the production loss is unclear yet. The government has also not released its first advance estimates of kharif crop production for 2026-27, which are usually issued in October after the completion of sowing.

The increase in prices is visible in retail markets. The average all-India retail price of rice was ₹49 per kg on November 10, nearly 14% higher than ₹42.96 per kg a year ago and 7% above ₹45.81 per kg a month ago, according to Department of Consumer Affairs data.

Broken rice prices averaged ₹34.87 per kg, against ₹32.63 per kg a month ago. The production concerns come as harvesting of the 2026-27 kharif paddy crop is underway. Uneven rainfall during the growing season has raised concerns over yields.

The intensifying El Niño could further influence rainfall patterns. In a November 6 report, S&P Global Energy said its analytics arm, CERA, estimates India’s paddy production in the 2026-27 marketing year will decline by 8 million tonnes year-on-year to 146 million tonnes.

Apart from weather-related supply concerns, rising demand for broken rice from the ethanol and poultry-feed industries is adding to pressure on the domestic market. Indian exporters anticipate possible restrictions on exports of 100% broken white rice amid higher domestic prices and increased demand from these sectors, S&P Global Energy reported on November 6, citing industry sources.

India had prohibited broken rice exports in September 2022 amid concerns over domestic availability and rising prices. The restrictions remained in place until March 2025, when exports were restored. No fresh restrictions have been officially announced so far.

The possibility of renewed curbs also comes amid rising rice exports from the country. India exported 10.68 million tonnes of rice, including basmati and non-basmati varieties, during April-September 2026, against 10.19 million tonnes in the corresponding period last year, an increase of 4.8%.

Non-basmati rice shipments increased to 7.63 million tonnes from 7.02 million tonnes, while basmati exports declined marginally to 3.05 million tonnes from 3.17 million tonnes. On November 6, the government doubled the quantity of rice offered for sale through electronic auctions under the Open Market Sale Scheme (Domestic) for 2026-27 to 5 million tonnes from 2.5 million tonnes.

The government had already sold 2.5 million tonnes of rice under the scheme to private parties by the end of October, against 1.1 million tonnes during the corresponding period of the previous financial year, according to a November 6 release by the Ministry of Consumer Affairs, Food and Public Distribution.

Alongside increasing supplies, the government has tightened stock monitoring. It has directed traders, wholesalers, retailers, large chain retailers, processors and millers to declare their rice and paddy stocks every Friday on the Food Stock Portal.

The disclosure covers basmati rice, non-basmati premium rice, non-basmati rice, parboiled rice, broken rice and paddy. The government has conveyed its concurrence to Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Telangana to impose stock limits on rice and paddy wherever considered necessary.

These limits will remain in force until January 31, 2027. Private weather forecaster Skymet Weather has said El Nino in the central and eastern equatorial Pacific continues to intensify, with the peak of the warming phenomenon yet to arrive.

It cited the US Climate Prediction Centre, which puts the probability of El Niño reaching its peak during October-December at 83%. This could also affect winter crops, which require lower temperatures and intermittent rainfall.

Pallavi Singhal covers agriculture, food policy and the rural economy from New Delhi. Over the past four years, she has reported extensively on farm policy, food inflation, procurement, agri-markets and rural livelihoods.

Before joining Hindustan Times, she worked at Moneycontrol and Informist. A journalism post-graduate, she started as a trainee reporter in 2019 with The Indian Express, Chandigarh. Away from the newsroom, she enjoys travelling and crime fiction—preferably mysteries easier to crack than government policy.Read More