El Niño Threat Lifts Rice Prices

Rice futures advanced further to near $13 per hundredweight, the highest level since May 26, driven by El Niño-related supply concerns. The weather event is expected to disrupt global agricultural production in the months ahead, with rice viewed as the most vulnerable crop. Forecasts suggest it will peak during the Northern Hemisphere winter and extend into early 2027, with Southeast Asia and parts of the Southern Hemisphere most at risk. Supporting this view, the International Grains Council (IGC) pegged 2026/27 global rice output at 545 million tons, unchanged from the previous month and slightly below last season’s record of 546 million. It warned that El Niño could pressure yields in major Asian producers, particularly Thailand. In India, weak monsoon rainfall has raised output concerns, though stocks remain ample. Government rice inventories hit a record 68.43 million tonnes as of June 1, well above buffer requirements.

Rice increased to 12.98 USD/cwt, the highest since May 2026. Over the past 4 weeks, Rice lost 0.37%, and in the last 12 months, it decreased 0.68%.

Rice futures rose above $12.2 per hundredweight, the highest in over a week, on climate risks and continued Middle East disruptions despite ample supply and relatively weak global demand. Major producers in Southeast Asia are bracing for an extreme El Niño weather pattern expected to bring hotter, drier conditions and potentially affect rice production. Philippines recently warned that it could cut paddy rice production by up to 700,000 tons, or 3.5% of the annual target. At the same time, farmers continued to face high input costs due to disrupted fuel and fertilizer supplies amid limited traffic through the Strait of Hormuz. Rice exports from Thailand slipped 10.75% from January to May compared to the same period of last year. Meanwhile, recent data showed India’s rice stocks held in government warehouses surged to a record high of 68.43 million metric tonnes as of June 1, up 15% yoy and more than five times the official buffer requirement of 13.5 million tonnes for July 1.