News - Impact Of Increasing Freight Cost On Basmati Rice Price

Basmati rice Prices is going up because of various factors such as supply and demand dynamics, weather conditions affecting crop yields, government policies, and global market trends. While increasing freight costs can contribute to higher rice prices, they are not the sole determinant.

Freight cost increasing more at least 2-3 times than usual why because several reasons such as :-

- Most vessels change route from via Suez into via the Cape of Good Hope

- Route via Cape of Good Hope is longer nearly 1.39 times than via Suez canal.

- Many vessels cut the space or anchor and wait until it is safe to pass to reduce risk.

As expected, until April-May, when Panama reopens and the Houthi situation in Suez Canal is better, rates may return to normal. However, cannot be sure for this because situation in these canals is still not stable.                           

Freightos Terminal data shows that Asia – N. Europe rates have increased 173% compared to just before the diversion announcements, to more than $4,000.

For Example, The rate to Durban has jumped to $1,200 per container from $700. "Due to this freight hike, buyers are not taking cargo this time,"As a result, prices of basmati rice have fallen in the domestic market now.

The Indian government has unveiled the Bharat Rice initiative, offering high-quality rice at an unprecedented price of ₹25 per kilogram. This bold step aims to address domestic food security concerns while simultaneously reshaping India's role in the global rice