Grains of Hope

India’s food market represents about 25% of the country’s GDP. The numbers are not easy to validate with significant variance amongst both government and statistical sources but I will try to present a plausible picture. Various sources, including APEDA, the USFDA, the UN FAO, and others, have numbers but still make it difficult to understand the whole picture with some degree of validation within a given time frame.

Broadly, the Indian food economy or market is valued at Rs 73.62 lakh crore or Rs 73.62 trillion, which translates to US$ 887 billion in FY 2023-24. This represents one-fourth of the country’s GDP, which is Rs 295 lakh crore or Rs 295 trillion, which translates to US$ 3.5 trillion.

Various sources expect food production to grow in the current year anywhere from 3.5% to 5.5% and the Indian food market to grow by 7.72% – here the discrepancy could come from the value added in the supply chain, including processing, logistics, and exports. Given the economic layers and preferences of the population for fresh food, it can be assumed that most of the value for domestic consumption comes from cereals and pulses, including rice. Rice is the leading exported food product with seafood in second place.

Drilling down into the rice segment, there are varying figures from government and private statistical sources and there are other sources that are simply out of date. To some extent, rice production and rice exports have been disrupted over the past two years, with the government banning the export of branded Basmati rice and setting a high floor price of US$ 1200 in August 2023, and then lowering the floor price to US$ 950 per metric ton in October 2023. 

KRBL is India’s largest rice exporter and its 307-page annual report for FY 2023-24 (downloadable from its website) is extremely informative and transparent about the company’s production and financial figures and its commitments to good governance, fair trade practices, and its social activities that extend beyond its employees to the community. Its global economic and rice consumption overview and that of Indian rice production and exports cite sources such as the IMF World Economy Outlook, Monthly Economic Review Reports of the Ministry of Economic Affairs, the USDA World Production, Markets and Trade Report 2024, and the DGCIS Data Query Portal.

The KRBL annual report describes the global economy as resilient in the face of various challenges such as the Russia-Ukraine war and the Red Sea crisis that may further impact global trade. It, nevertheless, sees the global economy growing at 3.2% in the current year and inflation to moderate. It foresees developed economies growing at 1.6 to 1.7%, and developing markets growing at 4.3 and 4.2%. Since the company is focused on rice production and is the largest exporter in the country, its analysis of rice demand anticipates a continued increase in rice consumption and demand at 522 million metric tons and a slight increase in global production shortfall to almost 6 million metric tons.

The report estimates Indian rice production at 136 million tons with slightly more than 16.4 million tons exported in FY23-24, a decline from the 22.35 million metric tons exported in the previous financial year, because of various factors including export restrictions. Although the export volume declined by 27%, the value which was US$ 10.4 billion only declined by 7.1% due to high global demand and better realizations for Indian rice. KRBL expects rice production and exports to rebound in the FY24-25 year and stable prices.

Freedom from hunger – an industry’s campaign

Of the 10.2 million tons of Basmati rice, 5.2 million tons were exported in FY23-24. The country’s leading Basmati exporter forecasts steady export demand in FY24-25 driven by long-grain specialty variants and the increasing preference for brown Basmati rice. What comes through from the KRBL annual report and other content on its website is the company’s commitment to research and development and an enlightened approach to exports and marketing.

These are reflected in the company’s community activities such as its investments in employee welfare, higher education, and its ‘Grains of Hope’ nutrition program throughout the country in addition to its solid investments in renewable energy and sustainable production practices. The company is no slouch in its modern marketing approach either, with new varieties that appeal to new urban demographics and its national campaign to promote delicacies made with Basmati varieties.