Rice at Three-Year Lows! Vietnam Floods the Market While Indonesia Hoards 3.7 Mt in Reserves, Will India & Pakistan Water Wars Change the Market?

From India’s record 136 million-tonne harvest to multi-year price lows in Thailand and Vietnam, here is a complete, up-to-date intelligence brief for momex.ae.

1 | Latest Market Updates & News

• 14 May 2025 – Indonesia: Government rice reserves hit an all-time high of 3.7 million t. Jakarta credits army-led procurement and forecasts 2025 production at 34.6 million t, up 4.8 % year-on-year. Surplus stocks let Bulog talk about export possibilities for the first time in a decade.
   
• 13 May 2025 – Basmati boom: India’s premium segment is projected to reach US $31.6 billion by 2027 (CAGR 9.1 %). FY 2023/24 Basmati exports were 5.24 million t (+15 % volume; +22 % value).
   
• 8 May 2025 – Malaysia: Kuala Lumpur hunts new suppliers as India-Pakistan tension threatens the 38 % share of its imports these two rivals provide. Authorities are courting Thailand, Vietnam and Cambodia.
   
• 8 May 2025 – World prices: Indian parboiled offers slipped to a 22-month low, Thai 5 % broken rice to a three-year low and Vietnamese 5 % broken to a near five-year low after New Delhi lifted its last 2022 export curb. Traders expect quotations to hover near US $410 / t FOB for 5 % broken through 2025.
   
• 7 May 2025 – Pakistan: Punjab bans paddy sowing before 20 May to save water and fight pests; violators face fines and jail under 1959/60 ordinances.
   
• 7 May 2025 – Thai tariff alert: Unless Bangkok strikes a deal with Washington by July, most Thai shipments could face up to 36 % U.S. duty, threatening Thailand’s 7.5 million-ton 2025 export target.
   
• 5 May 2025 – India: Despite the record harvest (Kharif + Rabi 136.4 million t), the Food Corporation is juggling stocks above buffer norms by selling into OMSS auctions and approving ethanol diversion.
   
• 2 May 2025 – Bangladesh: Border closures and new local crop knocked Miniket prices 16 % in one week; parboiled now US $0.62 / kg ex-mill.
   

2 | Global Production Status
 

India remains the anchor of world supply this season. The Ministry of Agriculture pegs combined Kharif and Rabi output at about 135–136 million tonnes of milled rice, the largest crop ever harvested in the country. Favourable 2024 monsoon rains and well-irrigated Rabi acreage underpin the gain, and the May release of two genome-edited, climate-resilient varieties should help keep yields high in 2025/26.
 

Indonesia has turned a corner on self-sufficiency: the latest USDA outlook forecasts 34.6 million tonnes, almost five percent more than last year. Government pump-irrigation, El Niño-mitigation programmes, and army-led grain procurement have all helped push national reserves to 3.7 million tonnes, allowing Jakarta to speak openly—for the first time in decades—about the possibility of limited exports in late-2025.
 

Vietnam’s 2024/25 campaign is broadly steady at around 26.5 million tonnes. Rainfall in the Mekong Delta has stayed close to the long-term average and the El Niño signal is fading, supporting both the winter-spring crop harvested in February–March and the summer-autumn crop now being transplanted. The result is heavy near-term supply that has pulled export prices to a five-year low.
 

Thailand is holding production close to 20 million tonnes. Reservoirs refilled after last year’s drought, but the strong baht and growing competition from cheaper Vietnamese and Indian cargoes are hurting exporter margins. Bangkok still targets 7.5 million tonnes of exports for 2025 but will rely on government-to-government deals to get there.
 

Pakistan expects roughly nine million tonnes of milled rice, yet that figure could edge lower. A newly imposed ban on early paddy sowing in Punjab—meant to curb water use and pest pressure—will push seedlings into hotter June weather, potentially trimming yields. Meanwhile, water shortfalls in Sindh pose a secondary risk.
 

Together these five origins account for more than 70 percent of global rice output; bumper crops in India and Indonesia dominate the supply picture, while weather and policy uncertainties in Pakistan and currency swings in Thailand shape the market’s upside risks.

3 | Major Exporters & Importers
 

• Export leaders: India (parboiled & 100 % broken), Thailand (hom mali/jasmine), Vietnam (5 % broken), Pakistan (IRRI & Basmati), USA (medium-grain to Northeast Asia).
   
• Import hubs: Philippines, China, Nigeria, Malaysia, Iran and the Middle-East premium Basmati corridor (UAE, Saudi Arabia, Kuwait). The EU remains a high-value niche for organic and GI-tagged Basmati.
   

Malaysia’s sudden diversification drive and Indonesia’s shift from net-importer to potential exporter are the two biggest directional changes this season.

4 | Product Quality, Harvest Windows & Current Dollar Prices

• Indian PR-11 steam (25 % broken equivalent): US $0.60 / kg FOB Kandla (–1.7 % WoW).
• Vietnam 5 % long-grain white: US $0.65 / kg FOB Ho Chi Minh (–1.6 %).
• Indian white Basmati (1121, 2-year aged): US $2.21 / kg FOB Mundra (≈ €2.05/kg, –2.4 %).
• Vietnam paper-dried specialty: US $2.13 / kg FOB Haiphong.
•  

Harvest calendar:

• South-west monsoon Kharif crop (India & Pakistan) sown June–July, reaped Oct–Nov.
• Rabi / dry-season crop (India, Bangladesh, Myanmar) transplanted Dec–Jan, cut April–May.
• Mekong Delta winter-spring harvest Feb–Mar; summer-autumn harvest July–Aug.
•  

Basmati quality hinges on low-temperature grain-filling in September; traders are already booking containers on fears of late monsoon rainfall.

5 | Market Analysis & Signals

1. Price floor from India’s policy pivot – New Delhi removed its 2022 export restrictions in March yet kept a 20 % duty on non-Basmati white and min price guidance for parboiled. Strong rupee appreciation and ethanol-diversion tenders should prevent a collapse below US $380 / t 5 % broken.
    
2. Geopolitical premium – Any flare-up along the Indo-Pak border would immediately spike freight quotes and premiums for Thai and Vietnamese 100 % B.
    
3. Speculation on Asian futures – Managed-money longs on Zhengzhou rough-rice hit an 18-month high in early May, anticipating tighter Q4 trade flows despite current surplus.
    
4. Tariff turbulence – U.S. 36 % threat on Thai cargoes and EU-India pesticide MRL negotiations could reroute as much as 1 million t among second-tier suppliers (Cambodia, Myanmar).
    
5. Currency play – A strong baht keeps Thai offers US $20–30 above Vietnamese at the same grade; should the baht soften, Thai exporters could claw back Middle-East demand.
    

6 | Forward Outlook (May–Sept 2025)
 

• Prices: Base case keeps 5 % broken Asia benchmark US $400–420 / t FOB through September. Upside risk to $450 if early monsoon deficit exceeds 10 %.
   
• Basmati: Premium likely widens to US $1.60/kg over standard white if EU finalises lower pesticide MRLs and Indian exporters pre-empt compliance with more expensive residue testing.
   
• Freight: Red Sea diversions add US $8–12 / t to West-Africa CIF. Any resolution could shave that margin off offers quickly.
   

7 | Tariff & Policy Watch
 

• India-UAE CEPA already exempts most Basmati; Indian exporters eye similar EU FTA talks (0 % duty vs. present €65/t CET).
   
• Thai–U.S. standoff could push Jasmine buyers to pay hefty ex-warehouse premiums in the U.S. retail channel.
   
• Pakistan sowing ban: while aimed at water conservation, it effectively cuts early-season supply, supporting Pakistan Super Kernal prices despite big Indian crop.
   

8 | Strategic Insights for Momex Stakeholders
 

• Buyers – Lock in Q3–Q4 Vietnamese 5 % broken while Mekong stocks are flush; hold off on Thai unless tariff clarity improves. Secure aged Basmati now – ageing tanks are limited and India’s ethanol policy may shrink top-quality availability later.
   
• Sellers / Millers – Promote organic/low-residue lines to EU; leverage GI tags for premium. Consider blending strategies for lower-end markets when Thai freight premiums bite.
   
• Investors / Traders – Watch Indonesia’s possible move from importer to exporter; a 500 000 t swing can shift Southeast-Asian price equilibrium. Track rupee and baht for currency-led arbitrage.
   

9 | Additional & Complementary Updates Not Yet Covered
 

• South Korea continues tendering 387 000 t of U.S. medium-grain under the 2025 TRQ; stable buying pace limits U.S. spot downside.
   
• Bangladesh port closures with India partly explain the 16 % weekly price slide; once reopened, regional flows could pressure Eastern-Indian mill quotes.
   
• El Niño hangover: while dissipating, hydrological drought in central Philippines could trim 2025 wet-season output by up to 450 000 t – a minor but notable tightening factor late in the year.
   
• Africa: Nigeria’s FX liberalisation has slowed imports; parboiled demand may rebound in H2 as naira stabilises.
   

10 | Conclusion
 

Despite multi-year lows on FOB charts, the rice market is anything but sleepy. Record Indian and Indonesian harvests have swollen supply, yet tariff threats, geopolitical flash-points, currency swings and fast-evolving weather keep volatility alive. For 2025 the smart strategy is two-pronged: secure near-term needs while prices are soft, but maintain option-style flexibility for Q4 when monsoon verdicts, Thai-U.S. tariffs and Pakistan’s water-curbing policies could all conspire to yank the market off its lows.
 

FAQs for Rice Market

Why are global rice prices so low in 2025?
Record harvests in India and robust output in Vietnam and Thailand, combined with the lifting of India’s 2022 export curbs, pushed FOB prices to multi-year lows despite steady demand.

Will India’s monsoon affect rice prices this year?
Yes. A normal monsoon should keep supplies comfortable, but any 10 % rainfall shortfall could lift 5 % broken quotes by US $30–40 / t almost overnight.

How will U.S. tariffs impact Thai rice exports?
If a deal is not reached by July, Thai shipments to the U.S. could face duties up to 36 %, making them far less competitive than Indian or Vietnamese rice and potentially forcing Thailand to discount elsewhere.

Is Indonesia still importing rice in 2025?
Indonesia has built record reserves and signals self-sufficiency by 2026, potentially reducing its import demand and altering Southeast-Asian trade flows.

Which rice segments offer the highest premiums now?
Two-year aged Indian 1121 Basmati and certified organic Jasmine command the strongest premiums—often US $1.50–2.00 per kilogram above standard white rice.