Global rice prices fell on September 30 following reciprocal actions by India and Pakistan to remove price caps and resume exports, according to Al-Jazeera. India recently ended its ban on the export of non-basmati white rice, in place for over a year. This came after Pakistan’s decision to lift the minimum export price (MEP) for all rice varieties, which had been in effect since 2023.

Pakistan's move was influenced by India's earlier removal of the $950 per metric tonne MEP on basmati rice in September. India and Pakistan are the only producers of basmati rice.

In a notice issued on September 28, Pakistan’s Commerce Minister, Jam Kamal Khan, stated that the government had acted on a request from the Rice Exporters Association of Pakistan (REAP) to eliminate the MEP, Al-Jazeera reported. Khan explained that the price floor had been introduced the previous year in response to rising global rice prices and India's ban on non-basmati rice exports, followed by more restrictions on basmati rice exports in August last year.

India, the world’s largest rice exporter, accounts for nearly 40% of global rice trade, holding a 65% share of the basmati market. Pakistan, the fourth-largest rice exporter after Thailand and Vietnam, holds the remaining 35%, according to Al-Jazeera.

During the 2022-23 fiscal year, India earned over $11bn from rice exports, with more than 4.5mn metric tonnes of Basmati rice contributing over $4.7bn. As Indian rice became scarce due to export restrictions, Pakistan emerged as an alternative supplier to several regions, including the Gulf, Africa, and Southeast Asia.

Between July 2023 and June 2024, Pakistan saw over 60% growth in rice export volume and a 78% rise in value, generating nearly $3.9bn from the export of almost 6mn metric tonnes of rice, including about 750,000 metric tonnes of basmati rice, according to Al-Jazeera.

However, former REAP chairman Chela Ram Kewlani noted that with Indian rice returning to the global market in large volumes, retaining the MEP would have harmed Pakistan's exports. He explained to Al-Jazeera that international market dynamics dictate rice prices, and with India re-entering the market, maintaining the MEP would have negatively impacted Pakistani exports.