Analysis: Global Rice Prices Stabilize—but India’s Surplus Will Dampen Any Recovery

By Rajendra Jadhav

MUMBAI (News in A Day) – Global rice prices have dropped to their lowest levels in years; however, they are not expected to decrease much more due to the strengthening of India’s currency, one of the leading exporters. Nevertheless, ample inventories within India along with an abundant harvest across Asia might restrict any significant price increases this year, according to remarks from industry leaders.

Although reduced rice costs may help cost-conscious shoppers in Africa and elsewhere, these decreases could compress the modest profits of farmers throughout Asia, where approximately 90% of global rice production occurs.

In April, the market experienced a downturn shortly following Delhi’s removal of all remaining export restrictions on grains that were put in place in 2022. This caused Indian parboiled rice export prices to hit their lowest point in 22 months. Meanwhile, Thai prices fell to levels not seen in over three years, and Vietnamese prices plummeted close to what would be considered five-year lows.

After dropping by almost a third from their peak levels in 2024, prices have stabilized according to traders and industry leaders; however, they will remain at this level throughout 2025 due to excess supplies in all key export nations.

"After the substantial downturn recently, we anticipate that prices won’t recover. The oversupply situation should keep prices from rising,” stated B.V. Krishna Rao, who serves as the president of the Rice Exporters Association.

The organization anticipates that the price for 5% broken rice at approximately $390 per ton will oscillate within a $10 range for the remainder of the year.

Himanshu Agrawal, the executive director of Satyam Balajee—a prominent rice exporting company—stated that prices would stay near their present levels unless the monsoon delivers an unexpected twist that impacts production.

BUMPER OUTLOOK FOR INDIAN EXPORTS

A good spell of monsoon rains is vital for the rice crop, which requires copious amounts of water. India's state-run weather office has forecast above-average monsoon rains for a second consecutive year in 2025, which will boost production.

Global rice output is expected to reach a record 543.6 million metric tons in 2024/25, up from 535.4 million tons the previous year, according to estimates from the Food and Agriculture Organization.

Total global supply, including stocks, is seen at 743 million tons, well above demand that is expected to rise to 539.4 million tons, the FAO estimates.

In India alone, rice stocks, including unmilled rice paddy, in government warehouses totalled 63.09 million tons on April 1, nearly five times a government target of 13.6 million tons.

With massive stocks and the expected rebound in production, buyers are in no rush to make purchases, while sellers are competing for market share - keeping global prices under pressure, said Agrawal.

The Rice Exporters Association anticipates an increase of about 25% in exports from India compared to last year, reaching a new high of 22.5 million metric tons this year.

One of the globe's leading rice exporting companies, Olam Agri India, remains optimistic and predicts that exports might surge up to 24 million tons.

The jump is likely to propel India back to its dominant share of the global market, which stood at more than 40% before it curbed exports in 2022, surpassing the combined sales of the next four largest suppliers - Thailand, Vietnam, Pakistan, and the United States.

"Nitin Gupta, senior vice president of Olam Agri India, stated that India has begun to regain its lost market share," he said.

RUPEE REBOUND, STATE DEMAND CREATE A FLOOR

When India's broken rice came back to the market in March, demand was stoked by a weak rupee, trading around 87.2 against the dollar, which helped to drive prices down.

However, the rupee has since recovered to 84.55 against the dollar, and other exporting nations' currencies have strengthened, too, which has prevented global rice prices from falling further, three grain dealers said.

Further providing a floor, Indian farmers have the option to sell paddy to the government. If exporters begin offering lower prices than the state-fixed price, farmers will start selling to the government.

Each year, the government increases its minimum support price, which is an additional element preventing export prices from declining even more.

RATTLED RIVALS

Predictions of increased supply from India have unsettled competing suppliers.

In the initial three months of 2025, Thailand saw its rice exports drop by 30%, amounting to just over 2.1 million tons. This decline was largely due to India selling the commodity at more competitive rates, which led purchasers to shift their orders accordingly, according to Chookiat Ophaswongse, who serves as the honorary president of the Thai Rice Exporters Association.

In 2025, according to estimates from trade organizations in both nations, Thailand’s exports may decrease by 24% compared to the previous year, totaling around 7.5 million tons, whereas Vietnam’s shipments are projected to decline by 17%, also reaching approximately 7.5 million tons.

In February, Thailand experienced a 30% decrease in the price of rice paddies compared to the previous year, which led to farmer protests and encouraged the government to provide subsidies to rice producers. To assist local farmers, Thailand looked for collaboration with India and Vietnam regarding declining rice prices, as stated by the country’s commerce minister in March.

Benefiting from the price slump are the top rice-importing countries - the Philippines, Indonesia, Saudi Arabia, and African countries such as Senegal, Nigeria, and Ghana.

In Ivory Coast, rice demand has grown with an influx of people from neighbouring countries, said Yacouba Dembele, director of the Agency for the Development of the Rice Sector.

"India's export curbs were a bonanza for other Asian suppliers in the past two years. Now, the resumption in exports would make buyers happy with the moderation in prices," said Rao at the Rice Exporters Association.

(Reporting by Rajendra Jadhav; Additional reporting by Panarat Thepgumpanat in Bangkok and Loucoumane Coulibaly in Abidjan; Editing by Mayank Bhardwaj and Sonali Paul)