Indian domestic rice prices, particularly non-basmati varieties, have climbed over 10 per cent in the past few weeks on a widening demand-supply gap and fears of a deficient monsoon, according to industry stakeholders quoted by The Hindu Business Line's Agri Business desk. The Centre's decision to raise the minimum support price (MSP) for paddy in the 2026-27 crop year to ₹2,441 a quintal from ₹2,369 earlier has also supported the uptrend, said Rajesh Jain Paharia, a New Delhi-based exporter.
Premium Varieties Bear the Brunt
The demand-supply gap is most acute for premium varieties such as Sona Masuri, Ponni and Masuri, though its impact is felt even in broken rice prices. "It is a case of demand and supply despite the Centre saying rice production was record high in the 2026-26 crop year. But this might result in headline inflation, as the RBI fears," a New Delhi-based analyst said, adding that millers do not have ample supply.
Jain said the price rise is primarily due to the supply-demand situation. "Prices of some premium varieties have increased, and it is reflecting across all varieties," he said. A North Chennai trader reported that premium white, parboiled and steamed rice have all turned costlier, with quality old white rice commanding up to ₹1,900 per 26-kg bag against ₹1,600 for new rice. Rice prices have increased by at least ₹10 a kg as paddy rates have moved up.
Monsoon Deficit and Seasonal Supply Gap
As of August 7, the monsoon was 11 per cent deficient, a factor that historically pushes rice prices higher. "Even basmati prices are up. On the other hand, the area under maize is low. As a result, rice will be in demand for ethanol production," the analyst said. With the zaid (summer) and rabi harvests fully arrived and kharif arrivals due only after October, the market is in a seasonal squeeze. The analyst also pointed to gaps in official data: since the government sticks to the "historical statistics system", production data may be incomplete, and "there could be some gap in the record stocks with the Food Corporation of India".
Record Output Estimates vs. Millers' Reality
Officially, the Ministry of Agriculture's third advance estimate pegged rice production at a record 154.02 million tonnes. As of July 1, the Food Corporation of India (FCI) held 40.31 million tonnes of rice and 38.74 million tonnes of paddy — enough to yield almost 26 million tonnes of rice. Yet millers report a slight shortage of paddy, according to M Madan Prakash, President of the Tamil Nadu Agri Commodities Exporters Association.
Though rice prices are up, they seem to have stabilised for now. But millers say prices usually rise at this point in time, and this year, the increase is more. They are reporting a slight shortage in paddy. — M Madan Prakash, President, Tamil Nadu Agri Commodities Exporters Association
Prakash also said the Swarna variety available in West Bengal has risen to ₹34 a kg ex-mill from ₹30 over the past few weeks. The table below summarises the key price movements:
| Commodity / grade | Earlier price | Current price | Change |
|---|---|---|---|
| Swarna rice, West Bengal (ex-mill) | ₹30/kg | ₹34/kg | +₹4/kg |
| Old white rice, North Chennai | — | ₹1,900 per 26-kg bag | — |
| New white rice, North Chennai | — | ₹1,600 per 26-kg bag | — |
| Paddy MSP, common variety (2026-27) | ₹2,369/quintal | ₹2,441/quintal | +₹72/quintal |
Price Outlook Tied to OMSS
Jain said prices may drop once the open market sale scheme (OMSS) gathers momentum. "But right now, the rice quality is 'just marketable'. So no one is coming forward in the OMSS tender," he said. The analyst, meanwhile, questioned the fate of a committee set up to examine consumer-preferred rice varieties: "When will the committee submit its report?" With the kharif season's new crop still months away and public stock sales hamstrung by quality concerns, the near-term supply pressure on Indian rice prices appears likely to persist — a dynamic that the RBI fears could feed into headline inflation, according to the analyst.
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