Global Rice Prices Drop After 15-Year Highs Due to Favorable Weather

Billions of households worldwide sigh in relief as rice prices have dropped from 15-year highs. Rice prices have gone up over the past couple of years due to various weather phenomena such as El Niño, floods, and delayed monsoons. India, known as the world’s top rice exporter, announced export bans back in 2023 to ensure their own supplies due to erratic rainfall distribution that affected rice production. The ban contributed to shortfalls in production, hiking up rice prices globally.

Now, with more favorable weather in many rice-producing countries, global rice stocks have become sufficient, prompting a reduction in rice prices. India, which lifted their export ban last year, is expected to produce more of the crop, spurring the United Nations’ Food and Agriculture Organization to increase its 2024-25 global rice output estimate by 3.6 million tonnes to 534 million tonnes. Cambodia and Myanmar are also projected to have a boost in production, increasing ending stockpiles to 206 million tonnes.

32-year-old Yassine Toure, a roadside eatery cook in Dakar, Senegal, says she can breathe a bit easier now. According to Toure, whose family consumes 25 kilograms of rice a week, rice had been “so expensive that, at one point, buying it was seen as a luxury.” She further stated, “I don’t have to worry all the time about how to feed my children.”

Rice prices are expected to decline further with good rainfall boosting rice production in Asia last year, and forecasts that India will have a decent rainy season that won’t be affected by El Niño. Peter Timmer, Professor Emeritus at Harvard University who has decades of expertise in food security, stated, “As the world’s largest rice exporter, India is keen to regain the markets that it had to give up during the export controls.”

While the drop in rice prices and sufficient stockpiles can be seen as good things by many consumers, they pose a risk to farmers. Economist Shirley Mustafa stated that the plunge in rice prices may “spur farmers to plant less in the approaching season, risking a cut in supplies.”

“Low prices are bad for any producing country like India because they have reduced the profit margins of exporters as well as farmers,” added B.V. Krishna Rao, president of The Rice Exporters Association. 

The abundance in stocks has also pushed Thai white rice to its lowest amount since 2022. Thai farmer Sutharat Kaysorn already feels the pain of the low rice prices. Like Kaysorn, many Thai rice farmers had called out the government in the last months, protesting the reduction in prices and asking them to boost support for farmers after a USD 56 million subsidy plan fell short of their demands.

Kaysorn, who owns about 100 acres of rice fields in Sing Buri, stated that she might not be able to take out credit to meet the next harvest. As it is, Kaysorn is already having a hard time repaying her loans on time. “The current paddy prices are not even enough to cover production costs such as fertilizers and workers’ wages,” she said.

According to Mustafa, the retail price of rice in various countries is determined by various factors. These could range from “the strength of the local currency to transport expenses, reserves in importing nations, cost of credit to finance overseas purchases,” and so on.

In the Philippines, where rice is a staple, the government had to intervene to reduce sky-high rice prices by declaring a food security emergency. This allowed them to release buffer stocks, effectively easing local prices. Fheri Oris, who sells rice in her corner store in Batangas, said that the reduction in local prices has helped her and her family of three, giving them disposable income. “The savings are not substantial, but they help relieve the pressure on our household budget. When prices fall, people tend to buy more. I hope it stays that way,” she said.