Author: Alvaro Durand-Morat

The global rice market in the last two years has been a rollercoaster driven mostly by India’s export restrictions and, since October of last year, by its massive rice crop. India’s production performance has been remarkable, breaking a new production record every year for the last ten years. USDA (2025a) estimates that production in marketing year 2024 (still in progress in India with the smaller rabi crop) will reach 147 million metric tons (MMT), milled basis, and exports could go as high as 24.5 MMT, significantly above the record 22 MMT exported in 2021.

Indonesia is also contributing to the bearish tone of the global rice market. While total rice consumption and production have followed a downward trend in the last decade, consumption rebounded in 2023 and 2024 while production kept falling, which created a surge in imports. Indonesia was the second-largest rice importer in 2023 and the largest in 2024, when imports reached 4.7 MMT. Weather is supporting the growth of production in 2025, which, together with ample stocks bought at competitive prices, suggests that Indonesia will need less than 1 MMT of imports this year (USDA, 2025a).

From the above, we can infer why long-grain rice prices have been under pressure since last October (Figure 1). Export prices out of Thailand and Vietnam have decreased by over $160/MT or 29% in the last six months, although they seem to have found a floor at around $400/MT in the last few weeks. Export prices out of Mercosur (Argentina, Brazil, Paraguay, and Uruguay) have also decreased sharply; for example, the export price of Uruguayan 5% long-grain rice averaged $582/MT in March relative to $800/MT in October, according to FAO (2025). The export price of U.S. long-grain #2/4% decreased but to a smaller extent (12%) over the last six months and seems to have found a floor at around $650/MT. Interestingly, amid decreasing long-grain prices across the board, U.S. export prices remain more resilient, even when the low milling quality of the U.S. crop has been a significant concern. Of particular concern for the milling industry is the fact that U.S farm prices have remained mostly unchanged: USDA average farm price decreased only 3% from $14.5/cwt in August to $4.2/cwt in April (USDA, 2025b). Lower export prices and steady domestic paddy prices put the squeeze on milling margins. 

Nine months into the 2024/25 marketing year, the U.S. has exported 2.29 MMT (paddy basis) of long-grain rice, a 21% smaller amount relative to last year, driven by a decrease in paddy exports to all major markets (Mexico, Central America, and Colombia). Paddy rice from Mercosur continues to gain market share in core U.S. paddy markets. Exports of long-grain milled rice are at par with the previous year’s performance, thanks to the growth of exports to Iraq, which helps offset a sizable market loss in Haiti. U.S. exports will face higher competition from Mercosur in 2025, driven by a significant increase in production in Brazil and, to a lesser extent, Argentina, Paraguay, and Uruguay, which will result in more rice available for export. 

Given the global and regional situation described above, what can we expect for the upcoming marketing year? USDA’s March 2025 prospective plantings (USDA, 2025c) suggest a similar crop than last year (2.24 million acres in 2025 relative to 2.28 million in 2024). Excessive rains in Arkansas early April have complicated crop establishment and caused significant infrastructure damage. Despite that, as of May 4^th planting progress was almost 80%, but with a mix of situations depending on location (UADA, 2025a). The USDA projects the 2025 long-grain rice production at 167.2 million cwt, around 3% below the 2024 crop, and exports at 68 million cwt, slightly higher than in 2024. As discussed earlier, lower export prices have not caught up with farm prices so far, but a bearish global market will indicate that farm prices will adjust downward. For example, FAPRI (2025) projects that long-grain farm prices will drop below the reference price in 2025/26 to $13.28/cwt, while USDA’s WASDE report (USDA, 2025b) estimates an average farm price of $12/cwt for long grain rice. Looking at the University of Arkansas Rice Enterprise Budgets (UADA, 2025b) with those farm prices, the picture that emerges is worrisome, as all budgets yield negative returns above operating costs.

Figure 1. Monthly average export price of long-grain rice from selected exporters.

References

U.S. Department of Agriculture (USDA), 2025a. Production, Supply, and Distribution. Available at https://apps.fas.usda.gov/psdonline/app/index.html#/app/home. 

FAO, 2025. Rice Price Update. April 2025. Available at   https://www.fao.org/markets-and-trade/commodities/rice/fao-rice-price-update/en/. 

USDA, 2025b. USDA WASDE Report. May 2025. Available at https://www.usda.gov/oce/commodity/wasde. 

USDA 2025c. USDA Prospective Plantings. March 2025. Available at https://usda.library.cornell.edu/concern/publications/x633f100h. 

University of Arkansas Division of Agriculture (UADA), 2025a. Arkansas Rice Update 5-9-25.https://arkansascrops.uada.edu/posts/crops/rice/arkansas-rice-update-5-9-25.aspx

UADA, 2025b. 2025 Arkansas Crop Enterprise Budgets. Available at https://www.uaex.uada.edu/farm-ranch/economics-marketing/farm-planning/budgets/crop-budgets.aspx. 

USDA, 2025d. Rice Outlook. April 2025. Available at https://www.ers.usda.gov/publications/pub-details/?pubid=108546.

Food and Agricultural Policy Research Institute (FAPRI), 2025. U.S. Agricultural Market Outlook. Available at https://fapri.missouri.edu/wp-content/uploads/2025/04/2025-Baseline-Outlook.pdf. 

---

Durand-Morat, Alvaro. “Global Market Prospects for U.S. Long-grain Rice for the Upcoming Marketing Year.” Southern Ag Today 5(20.4). May 15, 2025. Permalink

On September 28, India lifted its export ban on non-basmati white rice and replaced it with a minimum export price (MEP) policy of $490/metric ton. On October 20, India announced the removal of the MEP policy on non-basmati white rice and the removal of export duties on other rice products (e.g., parboiled, husked, and paddy rice), effectively freeing rice exports. While this measure was expected anytime and the global rice market was already factoring in the change to some extent, the announcement is creating shockwaves throughout the global rice market.

India implemented the export ban on July 20^th, 2023 (see https://southernagtoday.org/2023/07/27/shaking-the-global-rice-market-india-bans-exports-of-white-non-basmati-rice/) amid fears of a short rice crop due to the projected dry Monsoon that never materialized. India harvested a record rice crop (137.8 million metric tons) in 2023/24, but the export ban remained in place. Fast-forwarding to the current year 2024/25, the weather has been beneficial, and India is projected to harvest a new record crop (estimated at 142 million metric tons in October according to USDA) and carry record-high stocks. In summary, India’s production performance has been outstanding, which undermined the rationale for keeping the export ban for so long. 

Since late September when India started easing exports, Asian rice prices have been under downward pressure despite the strong import demand, primarily from Indonesia and the Philippines. For instance, the export price of Thai 5% rice dropped below $500/metric ton in mid-October for the first time since July 2023 (Creed Rice Market Report, 2024; USDA, 2024a), while that of Pakistani 5% rice dropped more drastically as Pakistan competes more directly with India in many African markets. The latest Creed Rice Market Report (November 6^th) suggests India’s export price for non-basmati white 5% rice is around $465/metric ton.

In contrast, rice prices in the Western hemisphere are still at a much higher level than those in Asia, and the downward pressure has not been felt so hard, at least not yet. For example, the average export price for Southern 4% long-grain rice average $779/metric ton in 2023/24 and has hovered around $800/metric ton since August. Export prices out of Mercosur have also fluctuated between $770-790/metric ton in the last few weeks. While Western hemisphere long-grain rice has historically enjoyed a price premium relative to Asian long-grain rice, we should expect an increasing downward price pressure in the coming weeks and months as India’s rice harvest and the Mercosur’s rice crop advances.

The million-dollar question for the U.S. rice industry is how will prices adjust this coming year, and the answer is: it depends. First, it will depend on the (most likely) downward adjustment in Asian export prices, which in turn depends (among other things) on how much rice India exports. A quick analysis using the Arkansas Global Rice Model (AGRM) and assuming India exports according to USDA projections in October (21 million metric tons) bring prices to $450/metric ton. However, if India decides to liquidate some stocks as well further increasing exports, prices may drop even further. Second, it will depend on the level of market integration with Asia. While historically Asian rice has not been prominent in the Western hemisphere, its presence is growing. The more market integration, the more pressure we should expect to receive, and an increasing price gap between Asian and Western Hemisphere rice could fuel market integration. Third, it will depend on the rice crop in Mercosur (South American countries that compete with U.S. long grain rice). USDA projects a slight increase in planted area relative to last year, which could result in more competition in core U.S. export markets.

Finally, it is important to discuss how much room there is for price adjustments and profitability. The November WASDE report (USDA, 2024b) maintains long-grain farm prices unchanged at $14.50/hundredweight ($319/metric ton). Using that farm-price as a reference and the University of Arkansas Division of Agriculture 2025 Rice Enterprise Budgets (Figure 1), we estimate the average net returns to range from $22.25 to $103.28/acre for the different rice production systems, significantly lower than last year’s net returns, which ranged from $97.50 to $153.70/acre. We estimate the 2025 breakeven prices to range from $13.26 to $14.22/hundredweight (cwt) across production systems. The downward pressure on prices due to India’s liberalization of rice exports could push farm prices further down in the coming months, which could further decrease the economic returns and affect the 2025 rice planting intentions.                      

Figure 1. Arkansas: Projected 2025 Net returns and Breakeven Price.

---

References

Creed Rice Market Report. 2024. Several issues. Available at https://www.riceonline.com/

University of Arkansas Division of Agriculture. 2024. 2025 Arkansas Crop Enterprise Budgets. Available at https://www.uaex.uada.edu/farm-ranch/economics-marketing/farm-planning/budgets/crop-budgets.aspx

USDA. 2024a. Rice Outlook. October 2024. Available at https://www.ers.usda.gov/publications/pub-details/?pubid=110218

USDA. 2024b. WASDE Report. November 2024. Available at https://www.usda.gov/oce/commodity/wasde

---

Durand-Morat, Alvaro. “What to Expect from India’s Removal of the Export Ban on White Non-Basmati Rice.” Southern Ag Today 4(46.4). November 14, 2024. Permalink

On July 20^th, 2023, the Government of India announced the prohibition of exports of white non-basmati rice (semi-milled or whole milled, whether or not polished or glazed: other; HS 10063090) effective immediately. This measure follows the implementation of a 20% export tariff on non-basmati white rice last September. Exports of basmati (aromatic) and parboiled rice are not affected.

The measure is expected to have a significant impact on the global rice market given that India is the largest exporter of rice. In the last two marketing years (2021/22 and 2022/23) India exported an average of 21.8 million metric tons or almost 40% of global rice exports. Figure 1 shows India’s rice export breakdown by category. The export ban affects 5.8 million metric tons or 27% of the rice exported by India, most of which is exported to Africa. The countries most directly affected by the measure are Madagascar, Benin, and Nepal because India’s white non-basmati rice is the bulk of their imports. At this point, it is safe to say no other single country (except maybe China?) could step up and supply that volume to balance the market. 

Figure 1. Share of India’s rice exports in the last two marketing years by category.

The export restriction comes on top of rising global rice prices. According to FAO, since June 2022 the all rice price index and the Indica (long-grain) index, which corresponds to white non-basmati rice, increased 14% and 16%, respectively. Export quotes for India’s Indica rice increased sharply from U.S. $ 355/ton a year ago to U.S. $495/ton in mid-July (Creed Rice Market Report). 

The export ban is expected to put upward pressure on rice prices, which can benefit the U.S. long-grain rice industry. Given current market conditions, U.S. long-grain rice is not competitive vis-à-vis Asian rice, the export ban could help reduce the price gap and increase the opportunities for U.S. rice. Nevertheless, the main challenge for the southern U.S. rice industry remains Mercosur, primarily Brazil.

Finally, it is important to acknowledge that the export ban could have severe food security implications, primarily among segments of the population that rely on rice as an affordable source of calories. This potential consequence of the measure is likely to catch the attention of the broader public in the coming months.     

---

Durand-Morat, Alvaro. “Shaking the Global Rice Market: India Bans Exports of White Non-Basmati Rice.” Southern Ag Today 3(30.4). July 27, 2023. Permalink

According to USDA 2023 Prospective Plantings report, the long-grain rice planted area is projected at 1.96 million acres, a 9% increase relative to 2022, but still slightly below the 5-year average (2.0 million acres). At trend yields of 7,299 pounds per acre, we could expect a 14.6 million hundredweight (cwt) or 11.4% increase in production relative to 2022.

With the expected increase in production, the pressure will be on exports to perform well and help keep market prices stable. While the share of long-grain exports to total use has been decreasing steadily since 2015, exports still accounted for between 41% and 48% of total long-grain rice use during this period^[1]. The short 2022 U.S. long-grain crop (on top of an already short 2021 crop) puts extra pressure on farm prices, which have reached record levels in 2022/23 (USDA estimates an average farm price of $16.90/cwt).

So far, 8 months into the 2022/23 marketing year, export performance has been lagging with only 34.9 million cwt (rough basis) of long-grain rice exported, compared to an average 52.4 million cwt during the same period in the last 5 years. Paddy rice exports are down almost half relative to last year, mostly due to a sharp 71% decrease in exports to Mexico and a 38% decrease in exports to Central America (Figure 1), where Mercosur (primarily Brazil) has displaced the U.S. as the top supplier. Exports of milled rice are showing a good performance despite the lack of price competitiveness, which indicates the importance of other factors aside from price. For example, the U.S. negotiated 250 thousand metric tons of milled rice exports to Iraq, a market in which U.S. rice is clearly not price competitive.

The expectation is that a larger 2023 U.S. crop and the smaller 2022 Brazilian crop (7.9% smaller than in 2021) could provide the incentives for the U.S. to reclaim at least part of the Mexican and Central American markets. However, other aspects related to (1) milling and culinary quality differences vis-à-vis Mercosur rice, and (2) the prospects of policy changes in Central America aimed at extending trade preferences to competing countries similar to those given to the U.S. under CAFTA-DR, may hinder the prospects for U.S. rice in these Latin American markets.

Figure 1. Exports of U.S. long-grain rice to Mexico and Central America in the first eight months of the last seven marketing years (rice marketing year: August-July).

---

^[1] USDA includes imports of fragrant (jasmine and basmati) rice in the rice supply and use estimations, but they are removed in this analysis as fragrant rice is a different market segment than long-grain rice.

---

Durand-Morat, Alvaro. “Global Market Prospects for U.S. Long-Grain Rice for the Upcoming Marketing Year.” Southern Ag Today 3(16.4). April 20, 2023. Permalink