Thai Rice Market: Softening Prices but Emerging Weather and Currency Risks

Thai rice fundamentals are shifting toward a mild surplus: production eases only slightly, but exports slip and domestic demand is flat, pushing stocks to their highest level in at least five years. Combined with softer international prices and a stronger baht, this environment caps upside for Thai white rice yet supports relative resilience for premium fragrant grades.

Thailand’s rice sector enters MY 2026/27 with comfortable supplies, cautious water management and intensifying regional competition. Milled production is forecast around 20.3 MMT, about 2% below MY 2025/26, driven almost entirely by a deliberate contraction in off‑season area rather than main‑crop losses. Exports are expected to stagnate near 7.3 MMT, down 7% from MY 2024/25, as India and Vietnam undercut Thai prices in commodity segments. Domestic consumption holds near 12.4 MMT, with tourism‑linked food service demand offsetting gradual declines in per‑capita rice intake.

📈 Prices & Competitiveness

Farm‑gate paddy prices in Thailand have softened from MY 2024/25 peaks, reflecting ample harvests and slower export demand. White paddy averaged about 7,338 THB/MT in January–February 2026, clearly below the 8,914 THB/MT seen a year earlier. This price easing is already discouraging marginal off‑season planting, particularly in higher‑risk water and burn‑prone zones.

Export quotations show a two‑tiered market. Standard 5% white rice has lost competitiveness against cheaper Indian and Vietnamese origins, while Thai fragrant rice (Hom Mali) retains a premium niche. Recent Vietnamese export indications put 5% broken fragrant rice broadly in the EUR 380–400/MT range (USD 415–430), with Jasmine at similar levels after FX conversion, broadly consistent with soft but stable global long‑grain prices.  

Indian FOB offers also confirm a gentle downtrend. Representative Indian long‑grain and specialty types recently moved around EUR 390–410/MT for high‑quality parboiled (e.g. 1121 steam/sella) and roughly EUR 200–230/MT for lower‑grade long white, after converting from the latest USD and INR quotations and aligning with commercial Indian offers in March 2026. These levels underline the pricing pressure on Thai standard grades.

Origin & Grade	Indicative Export Price (EUR/MT, FOB)	Trend vs mid-March 2026
Vietnam, 5% broken fragrant	≈ 390	Stable
Vietnam, Jasmine	≈ 395	Stable
India, long-grain parboiled (1121/1509)	≈ 400	Slightly softer
Vietnam, long white 5% (non-fragrant)	≈ 215	Slightly softer

🌍 Supply & Demand Balance

Thailand’s rice harvested area edges down from 11.0 Mha in 2024/25 to about 10.9 Mha in 2026/27, almost entirely due to a planned reduction in off‑season rice from 2.07 Mha to roughly 1.93 Mha. Main‑crop area is broadly steady around 8.94 Mha, anchored in irrigated central and lower‑northern plains. Overall rough production slips from 31.36 MMT to about 30.74 MMT, translating to a 2% drop in milled output.

Domestic consumption has structurally plateaued. Per‑capita use has fallen from 100 kg in 2018 to about 75 kg in 2022, with strong regional differences, but aggregate demand holds near 12.4 MMT thanks to tourism and food‑service recovery. Broken rice demand of around 3–4 MMT remains constrained by still‑elevated prices versus alternative feed ingredients, limiting further substitution into feed rations.

Exports are the weak leg. Shipments are projected at 7.3 MMT in both MY 2025/26 and 2026/27, down from nearly 7.9 MMT in MY 2024/25. White rice exports already fell 34% year‑on‑year to 4.5 MMT in MY 2024/25, overwhelming gains in parboiled and glutinous exports. The strong baht amplifies FOB price disadvantages: a one‑baht appreciation can add roughly EUR 11–14/MT to Thai offers, widening the gap to Indian and Vietnamese competitors across key African and Asian destinations.

📊 Fundamentals & Policy Drivers

Stocks building into a surplus regime. Ending stocks are forecast to climb from about 3.9 MMT in MY 2025/26 to 4.6 MMT in MY 2026/27, well above the 2.6–2.9 MMT range of recent years. At roughly 4.5 months of use (vs 2–3 months as a typical operational buffer), this signals a clear supply‑heavy balance and a structural cap on domestic price rallies absent a major external shock.

Government policy is actively steering acreage. A new off‑season support package of 7.3 billion THB (around EUR 190 million) pays farmers about 2,000 THB/rai (≈ EUR 400/ha) to switch from off‑season rice into alternative crops in MY 2025/26. Complementary credit and soft‑loan measures support paddy sales delay schemes and trader stockholding, aiming simultaneously to stabilize prices and curb over‑production in high‑risk burn areas.

Environmental enforcement is reshaping cropping choices. A nationwide no‑burn period from 1 February to 31 March 2026, enforced via satellite hotspot monitoring and sanctions on farmer support access, is limiting repeat off‑season rice cultivation. Violators risk suspension from support programs for up to two years and potential impacts on land‑use rights. These measures, primarily targeting off‑season rice, feed corn and sugarcane, structurally reduce high‑burn acreage and reinforce the gradual shift toward alternative dry‑season crops.

🌦 Weather & El Niño‑Linked Risks

Despite strong reservoir levels following a wet 2025 monsoon, Thai authorities are preparing for drier‑than‑normal conditions in 2026 as El Niño‑like patterns re‑emerge. The Thai Meteorological Department has warned of hot to very hot weather with daytime haze for 31 March–6 April 2026 across upper Thailand, including key rice belts in the North, Northeast and Central plains. Temperatures are forecast to reach 40–42°C in some inland areas, keeping irrigation demand elevated.

In parallel, the Department of Disaster Prevention and Mitigation has instructed provinces to prioritize water for households through at least mid‑May 2026, foreshadowing conservative irrigation allocations into the off‑season. Taken together, these signals justify the forecast contraction in off‑season rice and highlight a weather‑driven upside risk to prices later in 2026/27 if dryness persists beyond current expectations.

🚢 Trade Flows & Regional Context

Thailand’s export mix is shifting toward higher‑value fragrant rice, which is less exposed to direct price competition. Fragrant grades for China, Hong Kong, the United States and parts of the Middle East are expected to hold or slightly increase in volume. However, shipping disruptions and higher freight and insurance premia linked to ongoing conflict in the Middle East and Red Sea routes are delaying some orders and could redirect premium volumes to alternative markets.

Commodity‑grade white and parboiled rice face the stiffest headwinds. India’s improved export availability after the normalization of non‑basmati policies and Vietnam’s aggressive pricing in 5% and 25% white rice have sharply eroded Thai market share, particularly in Iraq, South Africa and parts of sub‑Saharan Africa where price sensitivity is high. Recent Vietnamese reports already flag slower export flows as prices dip, underscoring a competitive but demand‑capped global environment.

At the same time, currency moves are critical. While India and Vietnam benefit from relatively weaker currencies and lower production costs, the appreciating Thai baht magnifies Thai FOB quotations. With India also facing logistical and freight risks into West Asia due to regional conflict, some demand could divert to Thailand or Vietnam, but prevailing high Thai stock levels and policy goals suggest any upside for Thai exports will be modest and selective.

📆 Short-Term Outlook & Trading Implications

3–6 day domestic and export price tendency (in EUR terms):

• Thai white 5% FOB: Sideways to slightly softer. High stocks and regional competition are likely to keep offers capped, even if local heat raises short‑term weather concerns.
• Thai fragrant (Hom Mali) FOB: Largely stable. Premium segments remain underpinned by steady demand and limited direct substitutes, though Middle East freight risks may add some basis volatility.
• Regional benchmarks (Vietnam & India): Mildly soft bias as recent Vietnamese export prices show marginal declines and Indian offers remain competitive, collectively setting a low ceiling for Thai standard grades. 

🧭 Trading Recommendations (Short-Term)

• Importers: For white and parboiled segments, use current softness to extend coverage modestly into Q2–Q3 2026, but maintain flexibility given potential weather‑driven volatility later in MY 2026/27.
• Exporters in Thailand: Prioritize fragrant and specialty contracts where Thai origin retains a clear quality premium; use currency hedging to manage baht appreciation risk that can quickly erode margins.
• Feed and industrial users: Monitor broken rice versus alternative feed grains; current high stocks suggest limited upside, but local dryness and cross‑commodity policy (corn, wheat) can temporarily tighten spreads.