Global Rice Prices Plummet as Production Rises and India Eases Export Policies

The global rice market has witnessed a consistent downward price trend over the past year, primarily driven by strong global production and notable shifts in export policies, particularly those of India. According to the Food and Agriculture Organization (FAO), the rice price index dropped by 1.7% month-on-month (MoM) to 104.1 points in Mar-25. This price also marks a significant 24.62% year-on-year (YoY) drop, highlighting a sustained downward trend since the start of 2024. The FAO attributed the MoM decline to weak import demand and ample exportable supplies, which have exerted downward pressure on international rice prices.

Figure 1. FAO Rice Price Index Trend from 2021 to 2025

In its Apr-25 Rice Outlook report, the United States Department of Agriculture (USDA) projected global rice production for the 2024/25 season to reach 535.8 million metric tons (mmt) on a milled basis, an upward revision of nearly 3.1 mmt from its previous estimate. This increase is largely attributed to improved production prospects in India, where output is expected to reach 147 mmt, representing a 6.7% YoY rise. This growth is primarily driven by a record harvest area of 51 million hectares (ha), up nearly 7% YoY. The expansion is underpinned by attractive price levels from 2023, enhanced government support to farmers, sufficient irrigation water availability, and generally favorable weather conditions. Other countries with notable rice production increase expectations are Indonesia (+4.8% YoY), Cambodia (+5.4% YoY), Brazil (+13.9% YoY), Taiwan (+12.4% YoY), and Venezuela (+13.3% YoY).

The anticipated rise in global rice production is expected to boost exportable supplies and shape global trade flows in 2025. According to the USDA, global rice exports are projected to reach 59.7 mmt, reflecting a 2% increase from the previous forecast but slightly below the record 59.9 mmt achieved in 2024. India is expected to account for most of this increase, with exports expected to reach 24 mmt, marking a significant 33.9% YoY rise. This surge is largely attributed to the lifting of export restrictions and strong domestic production. Cambodia and Pakistan are also set to increase their shipments, more than offsetting projected export declines from China, Thailand, and the United States (US).

On the import side, Nigeria’s rice imports are forecast to rise to 2.8 mmt, a 3.7% YoY increase, driven by stronger-than-expected purchases from India amid falling prices. India remains the dominant supplier to Nigeria, accounting for nearly all of the latter’s rice imports. Other countries expecting higher import volumes include Madagascar, Côte d'Ivoire, Nepal, Saudi Arabia, Singapore, and Senegal. These increases are expected to offset declines in imports by the European Union (EU), Indonesia, and Kenya.

Impact of India’s Export Policy Changes on Global Rice Prices

As a key player in the global rice market, India has significantly influenced the current dynamics of rising production and falling prices, largely due to recent relaxations in its export policies amid record stock levels. The Indian government initially imposed a series of export restrictions in Sep-22 to maintain domestic supplies and curb rising prices, particularly in anticipation of a potential El Niño-induced drought in 2023. These measures included additional export duties on unhusked rice (white and brown), duties on non-basmati white rice (excluding parboiled), and a ban on broken rice exports. A year later, with food inflation rising and the national elections in spring 2024, India further tightened its trade controls. These included an export ban on non-basmati white rice (excluding parboiled), a 20% duty on parboiled rice, and the introduction of a minimum export price (MEP) for basmati rice.

However, the 2023/24 El Niño event was less disruptive than anticipated, resulting in better-than-expected rice yields and a significant build-up in domestic inventories. According to the Food Corporation of India (FCI), rice stocks reached a record 63.09 mmt as of April 1, higher than the government’s target of 13.6 mmt. This surplus exerted pressure on the government to ease export restrictions. Consequently, in Sep-24, India lifted the export ban on non-basmati (excluding parboiled) rice and replaced it with an MEP of USD 490 per metric ton (mt). Duties on parboiled rice were reduced from 20% to 10%. In Oct-24, the government removed MEPs for both basmati and non-basmati rice and eliminated export duties on parboiled and unhusked rice. In Mar-25, India further allowed the export of 100% broken rice, citing record-high rice inventories.

Figure 2. Rice Price Trend Amid India’s Policy Changes

These shifts in India’s rice export policies have had significant impacts on global prices. For instance, following the initial trade restrictions in Sep-22, global rice prices surged due to strong import demand and reduced availability from India. Thai rice export prices increased from USD 439/mt in Sep-22 to USD 660/mt by Jan-24, while Vietnamese rice rose from USD 395/mt to USD 640/mt over the same period. The FAO Rice Price Index also spiked from 110.9 points in Sep-22 to a peak of 142.8 points in Jan-24. These increases reflect the market’s sensitivity to India’s policy stance and its dominant role in global rice trade.

Driven by a positive global rice production outlook for 2024, particularly in countries like the Philippines, Bangladesh, Brazil, the EU, and the US, global rice prices began to decline at the start of the year, despite India’s export restrictions still being in place. India’s restrictions and positive domestic production contributed to a build-up in the country’s rice stocks, prompting the government to ease them in Sep-24 and Oct-24. This policy relaxation further accelerated the global price downturn. 

According to Tridge’s Apr-25 Outlook report, the average price of Thai 5% broken rice fell to USD 424.67/mt in Mar-25, a 2.71% MoM decline and a 30.72% YoY drop, the lowest price recorded since Jul-22. Similarly, Vietnam’s 5% broken rice saw a modest 0.65% MoM increase to USD 386.50/mt in Mar-25 but was still down 32.19% YoY. 

On the other hand, India’s wholesale rice prices averaged USD 443.10/mt in Mar-25, a slight 0.23% MoM increase but remaining 27.72% lower YoY. These persistent low prices are largely a result of the surge in export volumes following the Indian government’s easing of export restrictions. By Mar-25, India’s rice exports for the 2024/25 season had already reached 19.87 mmt, surpassing the total exports of 16.34 mmt recorded in the 2023/24 season. Of this total, basmati rice accounted for 5.94 mmt, parboiled rice for 9.04 mmt, non-basmati white rice for 3.32 mmt, and broken rice for 800 thousand mt. Other rice varieties made up the remaining 760 thousand mt. This sharp increase in export volumes aligns with the Indian government’s broader objective of boosting agricultural and food exports to enhance foreign exchange earnings and support farmer incomes, especially as the domestic economy slows.

Looking ahead, global rice prices are projected to remain low throughout 2025, driven by strong global production and increased exportable supplies, particularly from India. As India ramps up its rice shipments to key markets like Nigeria and Indonesia, other major exporters such as Vietnam and Thailand will face intensifying competition. To maintain market share, these countries should focus on diversifying their export destinations and building stronger trade relationships with emerging rice-importing markets in Africa and Southeast Asia. Meanwhile, countries with growing domestic consumption, such as Nigeria and the Philippines, should prioritize strengthening their domestic rice production capacity to reduce import dependency.