An Indian company has reportedly shipped some 200 MT of basmati rice to China, the first time India has shipped this variety to the world's largest rice consumer. Rising disposable incomes in China are triggering demand for higher quality rice.

China's interest could further increase prices of basmati rice, which have risen 30 percent over the past year on overseas demand. Basmati rice, which commands a premium over other varieties, is costs 42 rupees a kg, or about 75-80 rupees retail.

India produces about 4 million MT of the aromatic grain annually, while the country's total rice output is about 90 million tonnes. India accounts for 70 percent of global basmati rice exports, while Pakistan provides 30 percent.

Exports of basmati rice from India in the year to March would be around the previous year's level of 1.1 million MT or slightly lower. But exports could grow more than 10 percent in the current marketing year ending March 2008.