Global agencies led by FAO project record production in the 2025-26 season.

By Subramani Ra Mancombu

The global rice market remains bearish, with the Food and Agriculture Organisation’s all rice price index near a five-year low. The bear grip on the market is firm as prices of Thailand’s 5 per cent broken white rice have dropped below $400 a tonne.

Global agencies such as the Food and Agriculture Organisation (FAO) and the US Department of Agriculture (USDA), besides research agency BMI, a unit of Fitch Solutions, are projecting rice production in the 2025-26 season at a new record, driven by favourable weather conditions.

“(Global) Production in 2024-25 and 2025-26 upgraded, largely on higher output expectations for India in both seasons. Forecasts were also raised for Bangladesh, Pakistan and Viet Nam, offsetting downgrades, namely for Iraq and the US,” the FAO’s Agricultural Market Information System (AMIS) said.

Index down 22%

The FAO, in its rice price update, said the all rice price index was down 22 per cent year-on-year at 105.5 points. June trade in Asia was slow as buying interest was subdued. A surge in freight rates weighed on container trade, it said.

BMI said rice prices have remained subdued in 2025, significantly below the highs reached in 2024 due to Indian export rice restrictions. “The easing of these restrictions and expectations for abundant harvests in large producing markets have been the main drivers weighing on prices. In line with data from the Indian government, we are expecting India’s rice harvest for 2025/26 to be the largest on record, driven by favourable weather conditions.” 

With Indian monsoon arriving eight days ahead of schedule and covering the entire country nine days before normal, it will be a determinant of the kharif rice harvest.

According to the India Meteorological Department, India has received 15 per cent surplus rainfall this monsoon. Data from the Agriculture Ministry this week showed the area under paddy was up 7.4 per cent at 69.3 lakh hectares year-on-year.  

Slack demand

“ The abundant harvest from 2024-25 was also in large part driven by above-average monsoon rains,” said BMI.

Data from the Thai Rice Exporters Association (TREA) showed that Thailand’s prices for 5% broken white rice dropped to $395 per tonne, a multi-year low, from $401 four weeks ago. Offerings from India, Pakistan and Vietnam ranged between $380 and $390 a tonne. 

“There is no demand since inventories with African countries are full. Demand from other origins are slow, though current spell of heavy rain in China may change the market dynamics in a few weeks from now,” said S Chandrasekharan, a New Delhi-based trade analyst.

BMI said the US rice crop was 19 per cent above last year, while its domestic stocks could be 24 per cent higher year-on-year. 

Prices projected lower

”Overall, the market remains bearish, with the last net long position recorded in June of 2024, and we have recently made a downward revision to our price forecast down to $13.9/cwt (hundredweight equivalent to 100 pounds) in 2025,” the research agency said. 

It said the net short position has narrowed for five consecutive readings up to June 24, and also that the current market positioning creates susceptibility to short-term upward movements due to short covering, a risk for prices.

Global rice prices have been ruling lower evern since India relaxed its curbs on the cereal’s export last year. First, it scrapped export duty on rice and the minimum export price on basmati shipments. Earlier this year, it removed the bar on exports of broken rice. India clamped curbs on exports as its paddy crop faced problems in 2022 and 2023 owing to deficient rainfall in the growing areas.

Published Date: July 9, 2025