Rice Market Analysis: Prices Steady Amid Weather Uncertainty and Evolving Supply Dynamics

The global rice market is experiencing a delicate balance between moderate price pressures and evolving supply behaviour, with market participants closely monitoring both exchange and physical prices. The CBoT rice contracts over the next year have posted marginal declines from their previous levels, while physical market prices in Asia—particularly from India and Vietnam—continue to show modest upward movement, signalling cautious optimism but heightened vigilance due to potential weather disruptions. Demand continues to hold firm in importing countries, with steady off-take for both basmati and non-basmati types.

However, regional weather anomalies, including delayed monsoons in key Asian producers like India and persistent dry or flood risks in Vietnam, are clouding the yield outlook for the upcoming harvests. As the world’s largest exporters adjust their policies post-pandemic, and with inventories in major importing nations remaining below average, the risk of sudden price spikes remains ever-present. Recent USDA reports indicate manageable but tightening stock levels, galvanising interest from both end-users and speculative participants. Amidst these cross-currents, rice market participants are urged to remain nimble, as a strong weather event or renewed export restrictions could sharply alter the price landscape.

📈 Prices

CBOT Rice Contract	Last Close (US-Cent/cwt)	Weekly Change (%)	Sentiment
Jul 25	13.36	-0.45%	Soft
Sep 25	13.47	-0.63%	Soft
Nov 25	13.70	-2.11%	Weak
Jan 26	13.86	-2.05%	Weak
Mar 26	14.01	-1.96%	Barely Steady
May 26	14.17	-1.94%	Barely Steady
Jul 26	14.34	-1.92%	Barely Steady

Type	Country/Origin	City	FOB Price (EUR/kg)	Weekly Change (%)
All Golden, Sella	India	New Delhi	1.08	+1.9%
All Steam, PR11	India	New Delhi	0.57	+3.6%
Al Steam, Sharbati	India	New Delhi	0.72	+2.9%

🌍 Supply & Demand

• Production: India remains the top exporter despite weather and policy risks. Early summer planting reports suggest an area similar to last year, but actual yields depend on monsoon performance.
• Vietnam: Minor weather disruptions and export demand remain robust; vessel loading times are stable, and there’s no major backlog at ports.
• Importers: The Philippines, Iran, and Africa are actively tendering, largely at spot and near-term positions, signalling high underlying demand. Stock levels in Bangladesh and Nigeria are below average, keeping pipeline buying steady.
• Inventories: According to the latest USDA report, global ending stocks are forecast to tighten modestly, with drawdowns in major importers outpacing slight increases in some exporting nations.
• Speculation: Net long positions in rice futures have decreased, reflecting cautious trade amid weather jitters and wary macrosentiment.

📊 Fundamentals

• USDA: Global production for 2025/26 expected to be 518 million tons (-0.7% y/y), with the biggest cuts in drought-affected India and Thailand. Ending stocks at 168 million tons (3% below the prior year).
• Export Policy: India’s ongoing export restrictions on certain rice grades remain, but no new measures were announced this week. Vietnam and Thailand are prioritising premium and speciality rice for export.
• Physical Market: Rising physical FOB offers across Indian and Vietnamese origins reflect resilience in Asian demand, while European buying is steady at firm but not yet elevated levels.

☀️ Weather Outlook & Yield Risk

• India: IMD forecasts a normal monsoon for June, but delayed onset and patchy distribution are reported in eastern states (Bihar, West Bengal), increasing the risk of lower yield potential unless rains normalise soon.
• Vietnam: Central regions expect scattered showers next week, improving crop establishment after earlier dry spell; flood risk remains low for the immediate term.
• Thailand: Southern regions above average rainfall; concern about waterlogging in some paddy areas.
• US: Southern rice belt sees favourable soil moisture; planting pace ahead of 5-year average.

🌐 Production & Stock Comparison

Country	2024/25 Prod. (MT)	2024/25 Stocks (MT)	2023/24 Prod. (MT)
India	127.5	26.2	130.1
Vietnam	29.0	3.5	28.7
Thailand	18.3	3.0	17.9
Pakistan	9.2	2.4	9.5
Philippines	13.4	3.1	13.0
China	147.0	70.8	147.2

📆 Trading & Price Outlook

• Indian and Vietnamese FOB prices are trending up, with a positive weekly change of 2–3% across key grades; underlying demand remains firm, especially in African and Middle Eastern markets.
• CBOT rice futures softened this week, reflecting improved US crop conditions and risk-off trading as weather outlooks stabilised slightly.
• Heightened weather risk requires close monitoring; traders should be alert to bullish surprises if Indian monsoon remains erratic or if Southeast Asian weather slips again.
• Importers advised to cover physical needs for Q3/Q4 now, as Asian supply risk premium could spike with any adverse policy or weather shock.
• Speculators may consider short CBOT futures with tight stops, anticipating more downside unless weather significantly worsens.

⏳ 3-Day Regional Price Forecast

Exchange/Origin	Contract/Type	Expected Range (Next 3 Days)	Trend
CBOT	Jul 25	13.30 – 13.50 US-Cent/cwt	Neutral/Bearish
India (FOB)	All Golden, Sella	1.05 – 1.10 EUR/kg	Steady/Firm
Vietnam (FOB)	Long White 5%	0.61 – 0.63 EUR/kg	Steady