China has resumed imports of broken rice from India despite previously rejecting several shipments over concerns about genetically modified organisms (GMOs) in the consignments. The move follows a period during which China halted purchases amid allegations of GMO contamination, although Chinese regulatory agencies had cleared the shipments.

Indian exporters report that China continues to buy broken rice, even as freight costs have risen sharply due to a 50 percent increase in bunker fuel prices linked to the ongoing conflict involving Iran. This surge in shipping expenses has affected the cost dynamics of rice exports. Broken rice is currently offered at around $300 to $310 per tonne on a free-on-board (f.o.b.) basis, while the container freight cost ranges between $75 and $80 per tonne, according to industry representatives.

The Iranian conflict has not disrupted the export of non-basmati rice from India, although shipments of basmati rice face challenges, particularly in West Asian markets. India began exporting broken rice to China in 2022 after record volumes were shipped in the 2021-22 period. However, the Indian government had imposed an export ban on broken rice that year, citing supply concerns following weather-related crop setbacks.

Indian broken white rice remains competitive internationally, priced at $335 to $339 per tonne, undercutting rivals such as Thailand ($423), Vietnam ($344 to $348), and Pakistan ($345 to $349). Analysts expect some easing in rice prices by late March or early April when the paddy harvest from Thailand and Vietnam reaches the market. Nevertheless, the potential development of a Super El Niño weather phenomenon may suppress any significant price declines by bringing drought conditions across key Asian rice-producing countries, including India, Thailand, Vietnam, Indonesia, and the Philippines.

Authorities in Malaysia and several Southeast Asian nations are reportedly preparing for possible climatic disruptions and geopolitical tensions, including potential conflict scenarios between China and Taiwan, that could affect regional food security.

Despite these uncertainties, demand for rice in global markets remains steady, supported by a healthy outlook for India’s current rabi paddy crop. South India has largely avoided the unseasonal rains and hailstorms that damaged wheat crops in northern regions during March, contributing to forecasts of a strong rice harvest. India’s rice production for the 2025-26 crop year is projected to exceed 150 million tonnes, surpassing previous records.

Market watchers note that fluctuations in bunker fuel prices and currency exchange rates continue to inject volatility into export pricing. These factors, combined with weather and geopolitical risks, maintain a degree of uncertainty in the near-term outlook for the Indian rice export sector.