Rice supply ​is expected to fall this year as farmers cut planting acreage across Asia because of fertiliser shortages and soaring fuel costs from the Iran war, with ‌an emerging El Nino also set to squeeze output of the world’s most consumed staple.

Rice is central ​to global food security, and even modest supply disruptions can ripple through countries, lifting prices and straining household budgets, ⁠particularly among price-sensitive consumers in Asia and Africa. The UN Food and Agriculture Organization in April forecast rice output would expand by 2% to a record high in 2025/26.

The effects of the Iran war are impacting farmers in top exporters Thailand and Vietnam as well as the import-reliant Philippines and Indonesia, ‌growers and traders said. The war has cut fuel and fertiliser flows through the Strait of Hormuz, a key chokepoint that connects the Gulf to global markets.

Southeast Asia’s mainly smallholder farmers also face mounting stress as the El ‌Nino weather phenomenon is set to usher in hotter, drier conditions for the region in the second half of the ‌year.

“Farmers ⁠have already started planting rice in some countries and are using fewer inputs because prices have gone up,” said ⁠Maximo Torero, chief economist at the UN FAO. “We are going to see a tighter global supply situation in the second half of the year and early next year.”

In 2008, export curbs by key suppliers more than doubled prices to about $1,000 a metric ton <RI-THBKN5-P1>, triggering unrest in several countries. More recently, supply tightness in 2022 to 2023, ​exacerbated by India’s export restrictions, lifted prices and prompted ‌panic buying.

SUPPLY-CHAIN DISRUPTION

Rice shipments are already facing supply-chain bottlenecks.

“Logistics have become a nightmare, especially in Asia as there is shortage of polypropylene bags, limited truck availability to move rice to ports and shipping itself has been disrupted,” said a Singapore-based trader at a top global rice merchant, who asked to remain unidentified as they are not authorized to speak to media.

While fertiliser shortages ‌and dryness are already curbing yields of smaller crops being harvested in Southeast Asia, the next crop will likely face ​a bigger reduction.

India, Thailand and the Philippines plant their main crops in June and July, while Vietnam and Indonesia are now sowing their second-season crops.

Most Asian producers grow two or three rice crops a year.

FARMERS ⁠CUT PLANTING

Sripai Kaew-Eam, a 60-year-old farmer in Thailand’s Chai Nat province about 151 km (94 miles) north of Bangkok, said high fertiliser and fuel prices have pushed production costs to about 6,000 baht ($183.99) per rai (0.4 acre), from around 4,500 to 5,000 baht for the previous crop, while the ‌price she receives for the unhusked rice she harvests is about 6,200 baht per metric ton.

Fertiliser prices have risen to 1,000 to 1,200 baht per bag, from 850 baht, forcing her to cut her use by half.

“Fertiliser prices are high, fuel prices are high,” she said.

The Philippines, the world’s biggest rice importer, faces a similar situation.

“Some farmers are now saying they may not plant or will reduce fertiliser use, which would inevitably cut production,” said Arze Glipo, executive director of the Integrated Rural Development Foundation.

The country’s output could fall by as much as 6 million tons from its typical 19 million to 20 million.

“That would leave the Philippines in a precarious position, as ‌imports are also uncertain due to export restrictions, making it extremely difficult to cover any production shortfall,” Glipo said.

In Indonesia, fertiliser supply is not a constraint but ​the El Nino is expected to curb output.

Indonesia’s statistics bureau estimates the rice harvest area in the March to May period will shrink by 10.6% to 3.85 million hectares (9.5 million acres), while unhusked rice production will drop ⁠11.12% to 20.68 million tons.

Despite the supply worries, the world has ample rice inventories following years of bumper output, with India, the world’s biggest ⁠exporter, holding a record 42 million tons or about one-fifth of global stockpiles, according to U.S. Department of Agriculture data, cushioning any drop in global production.

Most rice grade prices are currently steady but will likely rise even if the Hormuz situation ‌were resolved immediately, the FAO’s Torero said.

Opening the strait soon would avoid a major supply issue but “if we don’t reopen this in the next two to three weeks, the situation is going to get pretty serious,” he said.

($1 = 32.61 baht) 

Published on April 30, 2026