Thai Rice Exports Under Pressure as Monsoon Risks and Costs Mount

Thai rice exports are softening in early 2026 as weaker Middle Eastern demand, logistics bottlenecks and rising input costs offset firmer buying from Africa and parts of Asia. With the monsoon off to a dry and uneven start and fertiliser imports sharply lower, supply risks for the new crop are building, likely underpinning export prices despite the current demand drag. Export volumes have already fallen by double digits, and traders face war-risk surcharges and longer routes into key Middle Eastern markets. At the same time, food-security buying from Africa and Southeast Asia and relatively firm benchmark prices in India and Vietnam suggest any further production shock in Thailand could quickly translate into renewed upward pressure on global rice prices.

Prices

FOB offers in India and Vietnam provide a useful reference for Thai export competitiveness. Recent Indian and Vietnamese export quotes for standard grades cluster broadly in the EUR 310–470/tonne range after FX conversion, with fragrant and specialty types commanding notable premiums.

Internal offers for Indian rice in New Delhi currently show stable to slightly softer values over the past three weeks, with key long-grain and basmati-type grades broadly flat in EUR terms and small week‑on‑week declines of around EUR 5–20/tonne for higher‑priced organic and specialty categories. This signals a consolidating global price environment where downside is limited by weather and geopolitical risks but immediate upside is capped by weaker demand in some import regions.

Supply & Demand

Thailand exported 2.2 million tonnes of rice in January–April 2026, a 12% year‑on‑year decline, with export earnings of roughly USD 1.25 billion. The drop is concentrated in shipments to Iraq and other Middle Eastern markets, where geopolitical tensions, higher freight and war‑risk premiums have disrupted trade flows and reduced buying interest. These disruptions have already been visible since January, and industry expectations for 2026 exports have been revised down towards multi‑year lows.

On the demand side, parts of Africa and Asia are stepping in. Importers in Malaysia, the Philippines, South Africa, Angola and Mozambique have increased purchases of Thai rice as a hedge against weather‑related supply risks and broader food security concerns. This shift partly compensates for the Middle Eastern shortfall and aligns with reported firm demand from Africa and the Philippines for Southeast Asian rice more broadly.

Fundamentals & Weather

Thailand’s official monsoon season began on 15 May, but May rainfall came in below the 30‑year average, and water storage in the key Chao Phraya basin is only about 36% of capacity. This follows a May climate assessment that highlighted hotter‑than‑normal conditions and below‑normal rainfall in several central and northern provinces, and a June–July outlook that still calls for monsoon rains but with episodes of reduced precipitation in central Thailand.

Nitrogen fertiliser imports into Thailand fell by around 20% in January–April, tightening domestic input supplies. Stocks are expected to be sufficient only through about May, raising the risk that farmers reduce application rates in the current crop. Combined with the dry start to the monsoon, this could curb yield potential and keep Thai paddy availability tight into late 2026, even if planted area holds steady.

Outlook & Trading Ideas

Looking ahead to the critical June–July growing window, Thailand’s rice balance sheet appears increasingly weather‑sensitive. A normalisation of rainfall could stabilise production and keep export prices in a sideways to moderately firm range. However, a prolonged dry spell in the Chao Phraya basin, layered onto high fertiliser costs and ongoing logistical frictions into the Middle East, would likely push Thai export quotes higher relative to Indian and Vietnamese benchmarks.

• Importers in Africa and Southeast Asia: Consider advancing or staggering procurement for Q3–Q4 while Thai prices are only modestly firm, given the asymmetric upside risk from weather and fertiliser constraints.
• Middle Eastern buyers: Diversify origin mix and secure logistics capacity early; war‑risk surcharges and route disruptions are already compressing Thai margins and could tighten offers further if tensions escalate.
• Exporters and millers in Thailand: Hedge downside demand risk via flexible pricing structures but maintain a bullish bias on new‑crop values; any confirmation of below‑normal monsoon rainfall should be used to lock in higher forward sales.

3‑Day Directional View (EUR‑based FOB)

• Thai white and parboiled: Steady to slightly firmer; weather and logistics news likely to be more supportive than demand‑driven in the near term.
• Indian long‑grain and basmati: Broadly stable; mild softening pressure capped by firm global benchmarks and currency‑freight dynamics.
• Vietnam long‑grain and fragrant: Mostly steady with a slight firm tone, reflecting balanced domestic paddy markets and cautious export selling.