Rice prices in the global market will likely rise due to the balance swinging to a deficit after over a decade and increasing concerns over weather and fertilizer availability due to geopolitical crisis, analysts have said. 

“...we expect rice prices to maintain upward momentum over the coming quarters, with the 2026 annual average falling within a $11.7-12.5/cwt (45.36 kg) range, underpinned by rising concerns over weather risks and fertiliser affordability amid the ongoing US-Iran conflict,” said research agency BMI, a unit of Fitch Solutions.

The US Department of Agriculture (USDA), in its report last week, said global rice production is estimated to decline by 5 million tonnes (mt) in 2026-27 (September-August) from 537.8 mt in 2025-26. 

South Asia offtake to rise

It projected largest cuts for India (2.0 mt), Burma (1.0 mt), and the United States ( 1 mt). World rice consumption is seen up 3.8 mt to 541.4 mt, driven by increases in South Asia, especially India, and Sub-Saharan Africa as rice continues to be an important staple. 

Global stocks are projected to decline 3.6 mt to 192.7 mt with the largest reductions in India, Cambodia, Indonesia, and the US. In contrast, China rice stocks are forecast to increase 3 mt to 108.0 mt, accounting for 56 per cent of global stocks. 

The Agricultural Marketing Information System (AMIS), an arm of the UN’s Food and Agriculture Organisation (FAO), said global rice prices are mostly steady currently reflecting muted demand amid shipping disruption. “India’s export rates stagnant as market faces slow demand,” it said.

Iraq stops Thai buy

According to the Thailand Rice Exporters Association, the cereal’s prices increased by about $20 a tonne between May 6 and May 13. Vietnam has increased its rates by $60 since April 1, while India and Pakistan have increased them by less than $10 a tonne. 

“We have revised up our 2026 annual average price forecast for CBOT-listed second‐month rice futures from $11.2/cwt to $11.9/cwt. In line with our view that optimism surrounding global supply prospects would ease from end‐2025 levels, rice prices trended higher through early 2026, averaging $10.7/cwt in January, $11.0/cwt in February and $11.4/cwt in March,” said BMI.

Prices weakened briefly in April, slipping to $11.3/cwt as supply fundamentals, particularly expectations of robust global stocks, reasserted themselves. However, prices regained strength through early May, closing at $12.2/cwt on May 8, the research agency said. 

AMIS said Iraq has dropped out of the Thai rice market due to the blockage in the Strait of Hormuz. “Thai rice exports are seen recovering in the second half of 2026 if tensions in West Asia ease,” it said. However, shipments from Burma and the US would decline.  

Weak harvest prospects

BMI said while bearish sentiment in the rice futures market remains evident, it has softened notably in Q1 2026. “According to the US CFTC Commitment of Traders report, speculative positioning remained net short at 3,712 contracts as of May 5. This is below the consistently heavier net short positions recorded throughout 2025, when positioning frequently exceeded 3,000 contracts,” it said.

Though there was optimism over global rice production in 2025, the scenario has changed in 2026.

BMI said harvest prospects are weak in several major producers, including the US, Thailand, Vietnam, Pakistan and Brazil. “We are cautiously optimistic regarding output for the first (monsoon) crop in India, Vietnam and Thailand, which together account for over 50 per cent of global rice exports, supported by stable near-term weather conditions and sufficient fertiliser availability,” it said.

However, inventories, particularly in India, will provide buffer for any problem in the upcoming crop cycle. Governments’ policy support to overcome high fertilizer costs would help insulate yields.

But prices below historial peaks

BMI said that, though El Niño conditions could emerge from May, probabilities point to a weak event through August. By that time, key crop cycles, accounting for approximately 60 per cent of output in India, 70 per cent in China and 50 per cent in Vietnam, are expected to largely conclude.

With El Niño expected to intensify in the fourth quarter of 2026, the second crop in India and Thailand and the main crop in Bangladesh and Indonesia could face risks during yield-sensitive development stages. 

“We forecast global rice production to decline by approximately 0.5 per cent year on year in the 2026-27 season to 537.4mt, driven by declines of 2.0 per cent in India and 0.2 per cent in Thailand, alongside a 0.5 per cent increase in China,” said the research agency.

Nevertheless, prices will remain below historical peaks, capped by ample carryover stocks from the 2025-26 season, it said.

Published on May 18, 2026