India’s rice exports may fall to 24 million tonnes in 2027. Here’s what’s driving the decline

India’s dominance in the global rice market could face a test in 2027, as the threat of El Nino, shrinking paddy acreage and rising domestic prices threaten exportable supplies. The USDA expects the country’s rice exports to fall 4 per cent to 24 million tonnes.

The United States Department of Agriculture (USDA), in its global market analysis, attributed the projected decline to lower shipments of broken and white rice, alongside rising prices amid reduced exportable supplies, according to the Financial Express.

India accounts for around 40 to 45 per cent of global rice exports, making its production and shipment trends important for international supplies and prices. A fall in exports could affect overseas buyers as India competes with other major suppliers, including Thailand and Pakistan.

El Nino raises concerns over rice output

The production outlook is a key factor behind the expected decline in shipments. A strong El Nino weather pattern could disrupt monsoon rainfall, affecting paddy cultivation and yields.

“A strong El Nino weather pattern is causing bad monsoons, which is expected to drop India’s rice production by 4.5 per cent to 147 million tonnes (MT) in the current crop year (2026-27),” Suraj Agarwal, co-founder and chief executive officer of rice exporting and marketing firm Rice Villa, told FE.

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India produced 154 million tonnes of rice in the 2025-26 crop year, emerging as the world’s largest rice producer. If the USDA’s projection materialises, production would fall for the first time since the 2015-16 crop year, according to the report.

Lower output could leave less grain available for export after meeting domestic demand. Agarwal also said the USDA had lowered its forecast for global rice trade in the coming year by 1.3 million tonnes, which could affect international supplies and prices.

Paddy acreage falls in major producing states

The decline in the area under paddy cultivation is adding to concerns over the production outlook.

According to FE, the area under paddy fell 3.7 per cent to 42.92 million hectares in the current kharif season compared with the previous season.

Among the states reporting declines, Karnataka saw a reduction of 0.46 million hectares, followed by Telangana at 0.43 million hectares. Andhra Pradesh recorded a decline of 0.18 million hectares, while Tamil Nadu reported a reduction of 0.15 million hectares.

Lower acreage, coupled with rainfall deficiencies, could constrain supplies in the coming months. The impact is already visible in prices of some premium non-basmati rice varieties.

Prices of Sona Masoori, Ponni and Swarna have risen by 10 to 25 per cent compared with the previous year, according to FE. The increases have been attributed to lower paddy acreage and rainfall deficiencies, particularly in southern India.

Rising domestic prices may slow shipments

Higher prices in the domestic market could further weigh on exports by raising the cost of supplies available to overseas buyers.

Retail rice prices rose to Rs 46.92 per kg on October 11, up 10 per cent from a year earlier, FE reported. The report said lower production and rising domestic prices could slow rice exports during the current financial year.

The government, however, has substantial stocks that could help ease pressure on domestic supplies. An official told FE that government rice stocks stood at more than 38 million tonnes, against the buffer requirement of 10.25 million tonnes for October 1.

The government plans to release rice under the open market sale scheme to curb the price rise. Such releases could help improve domestic availability, although their impact on prices will depend on the pace of supply and demand.

India exports both basmati and non-basmati rice to more than 140 countries across Asia, West Asia, Europe and the United States. Its position in the global market means any sustained reduction in exportable supplies could have implications for international buyers.

Export earnings rise despite supply pressures

India’s rice export earnings have continued to grow, although shipment conditions remain challenging.

Rice shipments rose 2.17 per cent in value to $4.81 billion during April-August of the 2026-27 financial year, according to FE. However, supply disruptions and higher freight costs linked to the conflict in West Asia have continued to affect shipments.

The projected decline in exports comes as India faces pressure on several fronts, from uncertain monsoon conditions and reduced paddy acreage to higher prices at home. Government stock releases could help contain domestic prices, but the production outlook will remain a key factor in determining how much rice is available for overseas markets.