India's Rice Output to Drop, Prices May Hit Record Highs

India's rice production is projected to decline significantly this fiscal year, potentially driving prices to record highs, according to the central agriculture ministry. The drop is attributed to lower rainfall and the use of Food Corporation of India (FCI) rice stocks for ethanol production. Production is expected to fall to 147 million tonnes in 2026-27, down from 154 million tonnes in 2025-26. This marks only the 19th decline in 76 years, with the last drop occurring in 2015-16. Average rice prices have surged from Rs 27 in 2014-15 to Rs 49.42 recently. To curb rising prices, the government last week imposed limits on rice diverted for ethanol production, capping it at 324 crore litres from surplus FCI stock, and also restricted broken rice exports.