India’s basmati rice exports are likely to fall in 2024 after nearing a record high last year, as rival Pakistan is offering the grain at competitive prices amid a rebound in production, industry officials said.

India and Pakistan are the leading exporters of the premium long-grain variety of rice, famous for its aroma, to countries such as Iran, Iraq, Yemen, Saudi Arabia, the United Arab Emirates, and the United States.

India’s exports of basmati rice surged 11.5% from a year earlier to 4.9 million metric tons in 2023, just shy of the record high of 5 million tons hit in 2020, on lower supplies from Pakistan and stocking efforts by importing countries, industry officials said.

Basmati rice shipments helped the world’s biggest rice exporter to garner a record $5.4 billion in 2023, up nearly 21% from the previous year, because of higher prices, government data showed.

“Last year, buyers were hustling to stock up when Pakistan was facing production issues. This year, however, Pakistan offers lower prices than India due to increased production,” Vijay Setia, a leading exporter based in Haryana state of India, said.

Islamabad’s total rice exports could jump to 5 million tons in 2023/24 financial year, up from the last year’s 3.7 million tons, Chela Ram Kewlani, chairman of Rice Exporters Association of Pakistan (REAP) said last month.

The depreciation of the Pakistani rupee has made Pakistan’s exports more competitive, according to Akshay Gupta, head of bulk exports at KRBL Ltd (KRBL.NS).

Meanwhile, lower export demand amid an estimated 10% rise in India’s basmati rice production has started pulling down basmati prices in that country, said Gupta.

Iran, the biggest buyer of Indian basmati rice, slashed purchases by 36% in 2023, but higher shipments to Iraq, Oman, Qatar, and Saudi Arabia offset the shortfall, according to data compiled by India’s Ministry of Commerce and Industry.

Indian exports had lost momentum in September and October as the government imposed minimum export price (MEP) on basmati rice, but they quickly recovered, said a New-Delhi-based exporter.

In August, India imposed the MEP on basmati rice shipments at $1,200 per ton, exceeding prevailing market rates, before lowering it to $950 in October.

However, exports began faltering again in January, and may decline further in the near term as buyers delay purchases due to increased freight costs caused by disruptions in shipping via the Red Sea, exporter Vijay Setia said.

“Buyers are holding ample inventory; there’s no need for them to rush,” he said.