Rice Market: Strong Indian Volumes but Softer Global Prices Pressure Margins
Indian rice export volumes rise in 2025–26 but values fall on weaker African demand and stronger competition from Thailand, Vietnam and Pakistan.
Prices
Indian non-basmati export values fell by more than 10% in 2025–26 despite a 6.5% increase in shipped volumes to over 15 million tonnes, highlighting a clear price and margin squeeze. At the same time, current Indian FOB quotes for bulk grades such as PR11, Sharbati and 1121 steam are stable in late June, signalling that much of the downward adjustment has already been absorbed at origin.
Competition from Vietnam, Thailand and Pakistan is visible in recent export price moves. Vietnam’s 5% broken rice is quoted around USD 412/tonne FOB after a sharp rebound in late June, while Thai 5% broken remains firm in the USD 460–480/tonne range, both levels broadly above typical Indian non-basmati offers. This underscores India’s role as the volume and price anchor in the global non-basmati market, even as realised unit values trend lower year on year.
(Indicative EUR values converted from recent USD/tonne and local quotes.)
Supply & Demand
The central imbalance in the current rice market lies in India’s strong non-basmati supply versus a temporary cooling of demand in West and Central Africa. After heavy forward purchases in 2024–25—once Indian export restrictions were relaxed—many African importers entered 2025–26 with comfortable stocks and reduced appetite for spot buying. Foreign exchange shortages in several African economies further curbed near-term purchasing capacity, forcing rationed tenders and slower off-take.
On the supply side, India’s large crop and competitive prices keep it the dominant non-basmati supplier, even as Thailand, Vietnam and Pakistan compete more aggressively in shared markets. Recent Vietnamese trade data show higher export volumes but nearly 10% lower average export prices year on year, underscoring how exporters are discounting to secure demand. Thailand’s exports, by contrast, have faced logistical and demand headwinds, but Thai quotes remain firm overall, limiting their ability to undercut Indian offers.
Fundamentals & Policy
The divergence between export volume and value for India reflects a classic margin compression phase. With non-basmati shipments up 6.5% but export earnings down from USD 6.53 billion to USD 5.86 billion, average realisation per tonne has fallen markedly. This is consistent with a market where buyers have strong leverage: they are well-stocked, wary of policy risk and can switch between several major exporters.
Past uncertainty around Indian export policy has encouraged many importers to diversify origin. Buyers in Africa and Asia increasingly split tenders between India, Vietnam, Thailand and Pakistan to hedge against sudden restrictions or price spikes. At the same time, some origins (notably Vietnam) are signalling tighter supply in selected segments, leading to price recoveries there even while Indian offers stay under pressure. Overall, fundamentals point to adequate global availability but a re-balancing of margins along the value chain, with exporters absorbing more of the price adjustment than consumers so far.
Weather & Regional Outlook
Weather risks for 2026/27 remain a watchpoint but are not yet driving prices in the same way as demand dynamics. USDA’s latest global grain outlook continues to project comfortable rice stocks-to-use ratios, with production in key Asian exporters broadly aligned with recent averages. However, localised dryness in parts of Thailand’s Chao Phraya basin and ongoing irrigation concerns could cap Thai exportable surpluses later in the year, which would structurally support Thai and, indirectly, Vietnamese prices.
For India, near-term monsoon performance will be critical for confirming the sustainability of its large export surplus. Provided rainfall stays broadly normal and no new export curbs are introduced, India is likely to maintain its role as a low-cost supplier, particularly into Africa and South Asia. Any monsoon disruption or renewed policy tightening would quickly shift buyer sentiment back towards precautionary stocking and could reverse some of the current price softness.
Trading Outlook (Next 1–3 Months)
- Indian non-basmati exporters: Expect continued margin pressure in African business; focus on firming quality, reliable shipment performance and slightly longer-tenor contracts to lock in volumes where counterparties have FX visibility.
- African importers: Current conditions favour a wait-and-see or staggered buying strategy, with India offering competitive pricing and other origins keen to sell. Consider blending origins to capture discounts while avoiding over-concentration risk.
- Asian and Middle Eastern buyers: Monitor Vietnam and Thailand closely; any further tightening in Thai supply or freight disruptions could push their quotes higher relative to Indian and Pakistani offers, creating windows for opportunistic coverage from South Asia.
3-Day Directional Price Indication (EUR, FOB)
- India (New Delhi) – PR11 / Sharbati / 1121 steam: Stable to slightly softer; modest downside bias as African demand remains cautious.
- Vietnam (Hanoi) – 5% long white, Jasmine: Mostly steady after recent softening; scope for mild recovery if regional tenders resume.
- Thailand – 5% white: Firm; upside risk if logistics normalise and Middle Eastern demand returns more strongly.