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Rice Market Analysis

Rice is the primary staple food for more than half the world’s population. Its second primary use is the production of alcoholic beverages, and it also used to produce pet food.

Key facts about the rice market
  • Being the world’s primary staple food, rice is produced all around the globe. Around 500 million tonnes of rice are produced every year, with just 10% of that being traded outside domestic markets as most rice remains in the country in which it is grown.
  • The consumption of rice, as a staple food, is tied closely to population change. With the world population forecast to rise drastically into 2100, so is rice consumption. While rice consumption is expected to increase by about 25% in the next 25 years, the rate of change differs according to taste and economic strength. As consumers increase incomes, their tastes diversify, meaning the share of rice in one’s diet also changes.
  • The world’s biggest exporter of rice is India, at over 11 million tonnes. Thailand and Vietnam both export around 7-8 million tonnes per year. The US is one of the world’s top-ten exporters at around 3 million tonnes per year.
  • China has generally been the world’s largest importer of rice, at around 3 million tonnes per year. However, recently the Philippines replaced China as the world’s largest importer. Other major importers include various Middle Eastern nations such as Saudi Arabia, Iraq, Iran, and Jordan as well as the European Union.
  • The main price driver in the rice market is supply and demand, and then variety. Rice comes in hosts of different varieties, which are commoditized in long grain, medium grain, and short grain. Different countries have different tastes and preferences. For example, South Korea prefers medium grain, while Guatemala prefers long grain.

Key themes affecting the rice market

The rice trade is unique in that while it is labelled as one commoditized market, it involves the trade of multiple non-substitutable varieties. Additionally, rice is traded on a rough basis (unprocessed, still in the husk) and a milled basis (processed).

One of the most important factors impacting the rice market is weather. Rice is irrigation intensive, fields need to be flooded, but not over-watered. As examples, too much or too little of a monsoon in India will kill a crop, and drought in Thailand will greatly minimize yield. When a major exporter such as one of those two countries has weather issues, a great void is created in the market. This opens opportunities for other countries to develop their own rice exporting businesses. Vietnam and Burma have taken great advantage of this lately. Additionally, as US production has more manageable irrigation, its exports are more consistently reliable.

Another important factor that influences trade is currency. If for example a country has a strong currency against the US dollar, it makes its exports less competitive.

The most significant future factor for the market is population growth. With the number of people on earth growing rapidly, rice as a staple crop must increase in production.

On top of this, with rising economies and the demand for meat growing, an inexpensive staple food option such as rice retains its status as exceptionally important. South American countries compete with the US, and as agriculture expands in the region it will have the greatest impact on US export competitiveness. US prices for both cash rice and futures are tied heavily to the supply and demand balance sheet. Changes in imports/exports and production are the chief market movers.

Rice Variety
201720182019
Vietnamese 5 percent broken rice$336-$415 per tonne$390-$460 per tonne$325-$385 per tonne
Indian 5 percent broken rice$365-$415 per tonne$365-$415 per tonne$360-$385 per tonne
Thai Hom Mali$575-$1030 per tonne$980-$1250 per tonne$1030-$1275 per tonne
Uruguay 5 percent broken rice$485-$545 per tonne$520-$522 per tonne$515-$528 per tonne
US #2 Long Grain 4 percent brokens hard milled fob Gulf$435-$545 per tonne$520-$565 per tonne$465-$525 per tonne

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At IHS Markit we offer market-leading food commodities information solutions via our Food and Agricultural Commodities Market Reporting and Economics services across 20,000+ datasets. We are specialists in offering comprehensive data and analysis across the global agricultural commodities and processed food markets, with current, short-term and long-term solutions to support all your operational needs.

Current market information
Food Commodities News

Our Food and Agricultural Commodities Market Reporting service is the market leader in updates and news on the agricultural commodity and processed food markets, with modular channel access available including the global rice market. Coverage spans from pricing news and key trends impacting production to incoming legislation and geopolitical impacts to the market. A subscription also includes access to a range of historic data tools covering pricing, trade volumes and production at a granular level.

Short and mid-term forecasts
Weekly and monthly production, trade and price forecasts

Our Food and Agricultural Commodities Economics service is the only service in the market that provide comprehensive analysis of near-term market developments for the 12 months ahead, from market trends to supply-demand, production and price forecasts. A subscription to our rice channel includes supply and demand balance tables, import and export trade data, price forecasts, US and global acreage and production potential, weather forecasts, price outlooks and summaries of major USDA reports. Subscriptions also include daily market commentary to provide context for daily trading and procurement workflow needs.

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