- Global rice output is set to decline for the first time in 11 years, while record demand could tighten supplies.
- Lower production in key exporters and rising input costs may support higher global rice prices.
Global rice production is projected to decline in the 2026–27 season, marking the first annual drop in 11 years, according to the latest USDA global crop report. Output is estimated at around 538 million tonnes (milled basis), with lower production expected in key origins including India, Myanmar, and the United States. The decline comes at a time when global rice consumption and trade are expected to reach record levels, which could reduce global stockpiles and tighten the overall supply-demand balance.
Lower output expected in major producing countries
According to the USDA, the largest production declines are expected in India, Myanmar, and the US, with the US crop projected to fall by nearly 15% year on year due to lower planted area. In India, the world’s largest rice producer and exporter, the crop outlook is under close watch as concerns grow over the upcoming southwest monsoon. Weather forecasts indicate the possibility of a below-average monsoon, influenced by the expected development of El Niño, which could affect kharif rice planting and yields. At the same time, higher fertilizer and energy costs, driven by disruptions linked to the Iran conflict, are increasing cultivation costs for farmers across Asia. Since rice is a fertilizer-intensive crop, rising input prices could affect planting decisions and crop management in several producing countries.
Global stocks may decline as demand remains strong
Despite lower production, global rice demand continues to remain firm. USDA expects both global consumption and trade to reach record highs in 2026–27, which could lead to a decline in global ending stocks. India’s rice exports are still expected to remain strong due to ample domestic availability, while exports from the United States are likely to decline alongside lower production. Tighter global supplies could increase procurement pressure for major importing countries, particularly in Asia and Africa, where rice remains a staple food and demand is highly sensitive to price movements.
Rice prices already showing upward movement
Global rice markets have started reacting to the tighter outlook. Thai white rice prices, a key benchmark in Asia, have reportedly risen by around 15% since late March, supported by supply concerns and rising production costs. Similarly, Chicago rice futures gained 8% last week, marking their sharpest weekly increase in two years. The FAO rice price index has also moved higher, reflecting increased production and marketing costs across major exporting countries.
Outlook
The 2026–27 season marks a potential shift in global rice market fundamentals after a prolonged period of production growth. While supply remains adequate at present, lower output in key producing countries, combined with record demand, could tighten market conditions in the months ahead. Much will depend on the progress of the Indian monsoon, weather developments across Asia, and how rising input costs affect farmer planting decisions. Any further production disruption could add upward pressure to global rice prices and increase supply concerns for major importing nations.
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