Rice Market at a Crossroads: Oversupply Pressures and Policy Gridlocks Shape Global Outlook

Global rice markets are entering a period of heightened volatility as government stockpiles, particularly in India, reach historic highs while new harvests loom on the horizon. As of July 2025, rice inventories held in central government pools in India soared to 37.4-37.9 million tons, nearly three times the official buffer requirement. This dynamic stems from ongoing procurement initiatives, especially for coarse rice by the Food Corporation of India (FCI), and sustained favorable weather patterns across key producing states.

Yet, high inventory levels have failed to stimulate meaningful liquidation, despite attractive pricing schemes and attempts to distribute rice through various institutional channels. Administrative challenges continue to delay reforms such as the removal of the Public Distribution System (PDS) rice quota, further constraining the market. Compounding these issues, logistical and subsidy costs escalate, with the upcoming paddy season threatening to push stocks to even more burdensome levels.

Internationally, FOB prices from Vietnam and India remain stable amid global supply abundance, but potential weather disruptions and trade policy shifts are watched closely. The convergence of domestic oversupply, sluggish demand responses, and looming harvests places rice market participants at a critical juncture with significant implications for pricing, trade flows, and policy intervention.

📈 Prices

Origin	Type	Price (EUR/MT)	Previous Price	Change	Market Sentiment	Update Date
Vietnam	Red	0.89	0.89	0.00%	Stable	2025-07-12
Vietnam	Paper dried	1.95	1.95	0.00%	Stable	2025-07-12
Vietnam	Long, white, 5%	0.60	0.60	0.00%	Stable	2025-07-12
India	All golden, sella	1.05	1.05	0.00%	Stable	2025-07-12
India	All steam, pr11	0.56	0.56	0.00%	Stable	2025-07-12
India	White, basmati (organic)	1.91	1.91	0.00%	Stable	2025-07-12
India	White, non basmati (organic)	1.61	1.61	0.00%	Stable	2025-07-12

🌍 Supply & Demand

• India: Central pool stocks surged to their highest in 20 years (>37 million tons as of July 1, 2025), driven by strong procurement and excellent weather. Liquidation is slow; government efforts to offload rice under OMSS and other schemes have seen limited success.
• Vietnam: FOB export prices remain steady as local and global supply is ample.
• Demand: International buyers face little urgency, as stockpiles remain robust. India’s export restrictions and stalemates in public food programs keep global market activity subdued.
• Policy developments: Delays in reforming the PDS and complex administrative hurdles restrict the channeling of excess stock into export or alternative demand streams.

📊 Fundamentals

Country	Production (2024/25, MT)	Stocks (2025, MT)	Status
India	~128	37.4–37.9	Historic High
Vietnam	~43	6–6.5	Ample
Thailand	~20	3–3.5	Abundant
China	~148	>100	Very High

• India and China hold the largest global stocks, contributing to a supply overhang.
• Exportable surpluses from Southeast Asia and additional Indian stock keep global prices in check.

☀️ Weather Outlook & Crop Watch

• India (Punjab, Haryana, West Bengal): The 2024/25 season has seen above-average monsoon rainfall, supporting robust crop prospects. No major flooding or drought events observed recently; harvest quality is expected to be high.
• Vietnam, Thailand: Seasonal forecasts show normal to slightly wetter-than-average conditions, boding well for both main and late crops.
• Climate risks: Watch for unpredictable late monsoon activity or typhoon risk in Southeast Asia late July–September.

🚦 Market Drivers & Speculative Positioning

• Historic Indian stockpiles and slow government off-take represent major weight on prices.
• Poor response to OMSS and “India Brand” initiatives signals muted end-user and exporter demand.
• PDS policy and subsidy costs are under intense review — any reforms could trigger rapid changes in market flows.
• Speculative activity remains low as traders assess government and consumer responses to excess stocks.
• Near-term, participants await confirmation of new crop size and any export policy amendments.

📆 3-Day Regional Price Forecast

Market	Type	Spot Price (EUR/MT)	Forecast Range (EUR/MT)	Sentiment
Hanoi (VN)	Long, white, 5%	0.60	0.59 – 0.61	Stable
New Delhi (IN)	White, basmati (org.)	1.91	1.90 – 1.92	Stable/Soft
Hanoi (VN)	Paper dried	1.95	1.92 – 1.97	Weak/Soft

• Prices are expected to remain stable with a slight downside risk as liquidity and stock overhang persist.

⚡ Trading Outlook & Recommendations

• Exporters: Monitor pending PDS policy changes in India — potential for sudden new export flows if government opens up channels or initiates auctions.
• Producers: Be cautious about holding large inventories into harvest — strong supply may pressure values as new crop arrives from October.
• Buyers: No urgent need to cover forward requirements; consider spot coverage if competitive offers emerge and monitor regional weather risks.
• Speculators: Sideways action likely short-term; positioning opportunities may arise from government policy shifts or late-season weather events.

Key takeaway: Oversupply, high stocks, and subdued demand dominate the rice market landscape, keeping prices muted and volatility low barring unexpected policy or weather shocks.