Thai Rice Under Pressure as Exports Slip and Indian Offers Set the Floor

Thailand’s rice sector has entered 2026 on the back foot: exports in January–April fell about 12% year on year to 2.2 million tonnes, squeezed by geopolitical disruptions in the Middle East and aggressive price competition from India. At the same time, domestic growing conditions and input costs are deteriorating, raising medium‑term supply risks even as cheaper Indian parboiled rice anchors international benchmarks. Rice markets are thus caught between short‑term demand re‑routing and longer‑term weather and cost pressures. Buyers in South‑East Asia and Southern Africa have stepped in to partially offset weaker Middle Eastern offtake, but Thailand’s price premium versus rival Asian origins has triggered further switching, notably in Nigeria. Below‑average early monsoon rains and low water storage in the Chao Phraya basin, combined with tighter fertiliser imports, could curb yields later this year, limiting any downside in global prices despite currently abundant Indian and Vietnamese offers.

Prices

Indian parboiled rice is currently quoted near USD 340/t, versus roughly USD 474/t for comparable Thai grades, leaving a wide discount that is drawing demand away from Thailand. Converted to EUR (using ~0.92 EUR/USD), this implies about EUR 313/t for Indian versus EUR 436/t for Thai supplies, keeping a firm ceiling on Thai export price ambitions.

Internal offers confirm this competitive backdrop. Recent FOB prices from New Delhi for Indian rice range roughly between EUR 0.32–0.81/kg depending on variety and quality, while Vietnamese FOB values from Hanoi cluster between about EUR 0.33–0.87/kg for regular and specialty types. These levels are broadly steady over the past three weeks, underlining that Thailand’s challenge is less about absolute price volatility and more about its relative premium.

Supply & Demand

Thailand’s exports in the first four months of 2026 slipped to around 2.2 million tonnes, a 12% year‑on‑year decline, as conflict‑related disruptions and shipping uncertainty curtailed flows to Iraq and other key Middle Eastern destinations. This structural setback has left Thailand more dependent on opportunistic demand from South‑East Asia and Southern Africa.

At the same time, El Niño‑linked food security concerns have encouraged several governments to advance or expand import programmes, supporting aggregate regional demand for Asian rice. Stronger offtake from South‑East Asia, Angola and Mozambique has only partly offset Thailand’s Middle Eastern losses, however, meaning its global market share is eroding even as overall trade volumes remain solid.

Fundamentals & Weather

Thai production fundamentals are turning less favourable. Despite the official start of the monsoon in mid‑May, rainfall in May remained below the 30‑year average, and reservoir levels in the Chao Phraya basin sit near 36% of capacity, implying constrained irrigation supplies for June–July plantings. This heightens the risk of localized drought stress later in the growing cycle if the monsoon fails to normalise.

Input costs compound the challenge. Imported nitrogen fertiliser volumes in January–April dropped roughly 20%, while prices rose, pressuring farmers’ margins. Lower application rates are likely, which could translate into reduced yields and tighter exportable surpluses from late 2026 onward, especially for higher‑quality fragrant and jasmine segments where Thailand still commands a premium.

Trade Flows & Competition

India is exploiting its price advantage aggressively. With parboiled rice around EUR 313/t FOB equivalent versus more than EUR 430/t for Thai supplies, large importers such as Nigeria are reallocating volumes toward Indian origin. This substitution is particularly pronounced in price‑sensitive markets in West Africa and parts of the Middle East.

Vietnam also remains a strong competitor across medium‑ and higher‑quality white rice and jasmine categories, with Hanoi FOB offers in the EUR 0.33–0.48/kg range for common types and up to around EUR 0.87/kg for specialty rice. In this environment, Thailand’s strategy increasingly hinges on defending value‑added segments and niche quality premiums rather than competing head‑on in bulk, low‑price tenders.

Weather Outlook (Key Thai Growing Areas)

Short‑term weather indicators for central Thailand, including the Chao Phraya basin, point to a continuation of below‑normal cumulative rainfall following a dry start to the monsoon, consistent with emerging El Niño conditions in the wider region. While episodic heavy showers are possible, current patterns suggest uneven distribution rather than sustained recharge of water storage.

This raises the likelihood that irrigation allocations will remain cautious in the coming weeks, particularly for second‑crop rice. Any further deterioration in reservoir levels or confirmation of a stronger El Niño later this year would elevate the risk of output downgrades and could underpin a firmer price tone into the 2026/27 marketing year.

Trading Outlook

• Importers (price‑sensitive): Continue to prioritise Indian and Vietnamese origins for nearby shipments while Thai prices remain at a significant premium. Use current stable FOB levels in New Delhi and Hanoi to lock in Q4 2026 coverage.
• Importers (quality‑focused): For fragrant and jasmine rice, consider layering Thai purchases on any dips, as potential yield losses from low water and fertiliser constraints could tighten high‑grade availability later in the season.
• Producers & exporters in Thailand: Hedge downside export price risk in the short term, but retain optionality for a tighter 2026/27 balance sheet if El Niño‑related production issues materialise and Indian export policy or logistics shift.

3‑Day Directional Price View (EUR, FOB)

• India (New Delhi, parboiled & PR grades): Sideways; strong competition and steady demand suggest narrow intraday moves.
• Vietnam (Hanoi, 5% white and Jasmine): Mildly softer to flat as exporters defend market share against Indian offers.
• Thailand (benchmark white & fragrant, implied): Slight downside bias in the very near term due to weak Middle Eastern offtake, but medium‑term downside is limited by production and input cost risks.