Asian rice prices have climbed to their highest levels in almost two years, with 5% broken white rice from Thailand rising to $499 per ton as of Wednesday, according to the Thai Rice Exporters Association. This represents the highest price level since December 2024, marking a significant escalation in the cost of the staple grain. The surge comes as farmers across much of Asia are currently harvesting rice crops, with drier-than-usual weather conditions creating production challenges. According to the Agricultural Marketing Information System (AMIS) of the UN's Food and Agriculture Organisation, rice is among the crops most negatively affected by El Niño, with export offers increasing by $20 per tonne from India and Pakistan, and $30 from Thailand and Vietnam since July.
Global rice production is expected to decline this season for the first time in over a decade, with the US Department of Agriculture forecasting Indian production at 147 million tonnes, down 4.6 percent year-on-year. The AMIS projects a 2.4 percent fall in global rice production for the 2026-27 season, down to 552.47 million tonnes. This anticipated drop is particularly concerning given that more than half the world's rice is grown in South and Southeast Asia, where the current El Niño weather phenomenon is creating significant challenges. The USDA's Foreign Agricultural Service has identified that in Thailand, the main production risk lies with the off-season crop, which relies heavily on irrigation systems.
The price surge extends beyond Thailand, with rough rice futures in Chicago rising more than 80% since the start of the year. This increase comes even as prices for other major grains, including corn and wheat, are declining. In the Philippines, the world's largest rice importer, rice prices jumped 21% in October versus a year earlier, according to government figures released Thursday. The United Nations' Food and Agriculture Organization also expects a drop in world output during the 2026-27 season, adding to concerns about sustained price pressures. Additionally, Trading Economics reported that flooding in Thailand has disrupted rice transportation and raised concerns over potential planting delays.
The El Niño weather phenomenon currently underway is described as one of the most powerful on record and is linked to drier conditions across much of South and Southeast Asia. This weather pattern is creating hurdles for crops in major rice-producing regions, including India, the world's leading exporter. The ongoing El Niño has affected paddy crops across India, Pakistan, Thailand, Indonesia, Vietnam, the Philippines, and Malaysia. While higher wholesale prices typically take time to feed through to retail markets, the current price levels already show signs of rising costs in key importing regions, with the Philippines experiencing significant price increases in recent months.
