India’s rice output faces biggest drop in two decades

India anticipates a significant decline in its rice output this year, marking the steepest drop in two decades. The country, the world's largest rice producer and exporter, faces this challenge due to a prolonged dry spell during the crucial maturation period, according to industry officials. Reuters reports that below-normal rainfall has slashed the yield potential, particularly in southern and eastern states, leading to an estimated 10 million metric ton reduction in production.

This represents a 6.5% decrease from last year's record 154 million tonnes, the largest decline since 2009/10 when an El Nino-induced drought hit.

The monsoon season, which began on June 1, has brought 15% less rainfall than average, with some rice-growing areas experiencing deficits as high as 42%. Summer-sown rice, accounting for over 80% of total production, has seen its crop area dwindle by nearly 4% compared to last year. Winter-sown rice, the remaining 20%, is also likely to suffer as reservoirs hold less water than usual.

Local rice prices have already begun to rise, driven by expectations of lower production, pushing export prices to their highest level in over a year.

Despite holding massive rice stockpiles, India remains poised to maintain export levels at record highs. State reserves, including unmilled paddy, reached a record 59.6 million tonnes as of September 1, surpassing the government's target of 10.3 million tonnes by October 1.