Rice Prices Expected to Remain Firm Amid Fears of Production Decline

New Delhi. Rice production is likely to decline due to a 3.7 percent reduction in the area under paddy cultivation during the Kharif season, coupled with a 13 percent deficit in southwest monsoon rainfall. With the persistent impact of the El Niño weather pattern, there is doubt as to whether paddy and rice production will be satisfactory during the Rabi season as well. Meanwhile, strong domestic and export demand for rice points toward an upward trend in prices. Both common varieties and Basmati rice are currently trading at high price levels.

Market prices for various types and categories of rice have been on an upward trajectory for the past month to a month and a half, a trend likely to continue. According to the Price Monitoring Cell of the Department of Consumer Affairs, the all-India average retail price of rice reached ₹48.25 per kilogram on October 30, 2026—a 12 percent increase compared to the price on the same date last year.

The condition of the Kharif paddy crop is mixed. The situation is better in Punjab and Haryana, and is reported to be normal in Chhattisgarh and Uttar Pradesh; however, in other states—including Telangana and Odisha—the crop condition is less encouraging. Consequently, a 4–5 percent decline in paddy yield is anticipated. Harvesting of the new paddy crop has already commenced in Punjab, Haryana, and western Uttar Pradesh.

According to the Union Ministry of Agriculture, the area under paddy cultivation for the 2026 Kharif season has shrunk by approximately 4 percent compared to 2025, falling to 426.80 lakh hectares. The acreage under paddy has declined across all four major rice-producing states in South India: Karnataka, Telangana, Andhra Pradesh, and Tamil Nadu.

Domestic rice production for the entire 2026-27 marketing season (covering both Kharif and Rabi crops) is projected to decline to 147 million tonnes, a significant drop from the 154 million tonnes produced in the 2025-26 season. There is strong demand for Indian rice in several countries across the Global South and Africa, driven by its competitive pricing.