Rice prices in India jump 14% in two days as traders rush to Bangladesh

Rice prices in India have risen by up to 14% over the last two days, with big traders beelining for the more lucrative market of Bangladesh, which has allowed duty-free import of 500,000 tonnes of the staple, causing a temporary imbalance in domestic demand and supply.

Traders from West Bengal, Uttar Pradesh and southern India said they had prior information that Bangladesh was planning to temporarily remove its 20% import duty on rice and so had kept the commodity ready at their warehouses near the Petrapole Bengal-Bangladesh border. An official communication from Dhaka on import duty removal came on Wednesday.

At the consumer end, prices of Swarna variety have risen to Rs 39 per kg from Rs 34, that of Miniket has gone up to Rs 55 per kg from Rs 49, while the Ratna variety is selling for Rs 41-42 per kg compared with Rs 36-37 per kg earlier. Prices of the Sona Masoori variety have shot up to Rs 56 per kg from Rs 52 earlier.

Suraj Agarwal, CEO of rice exporting and marketing firm RiceVilla, said the National Revenue Board of Bangladesh announced the abolition of import duty on Wednesday afternoon and trucks from India started moving to Bangladesh from Wednesday night.

“Logistically and cost-wise it is more competitive to export rice through the Petrapole-Benapole border, and that is why millers from Uttar Pradesh and south India are sending rice though the land route,” he said.

The Swarna rice variety is consumed throughout India, while Miniket is popular in the eastern and north-eastern states. The Ratna variety is popular in northern India while Sona Masoori is mostly consumed in the southern states.

Dhaka’s move to remove the 20% import duty on rice is aimed at helping the country stabilise its market and provide relief to consumers from high inflation.

Rice prices in Bangladesh increased by 16% in FY25, when the nation had to import 13 lakh tonnes of the commodity to meet domestic demand.

CK Rao, a rice miller from Andhra Pradesh, said, “My trucks left for Bangladesh on Thursday morning.”

Keshab Kumar Halder, managing director of Halder Venture Limited, a rice exporting firm, said globally there is a surplus supply of rice, and in India, both the government and warehouses have healthy stock levels. “This has led to a drop in global rice prices. These export orders from Bangladesh will help the Indian market recover from the recent downturn by creating demand and partially offsetting the global price dip,” he said.