U.S. Rice Market Finds Support From Iraq Sale Amid Global Pricing Pressures
US RICE PRODUCERS
KATY, TEXAS
With data now available and the government back to work, we were hoping to start the untangling process for the market. However, this week’s export sales report is updated only through October 2, so we will still have to rely heavily on the narrative led by speculation and the rumor mill. Despite this, a confirmed sale to Iraq has ignited optimism in the U.S. long grain sector, as thoughts only weeks ago were that we may have to wait until January to confirm this sale. But with two 40,000-ton cargos with delivery dates of November 2025/February 2026, the mills are busy filling the order. The hope is that this leads to a demand for spot market rice, but with prices reported not to have exceeded $555 pmt FOB NOLA, cash prices aren’t likely to at numbers that will excite producers to sell.
Larger paddy sales to Central and South America have been happening as well, but the pricing still leaves something to be desired. Paddy prices have continued a slow decline, now reported well below that $300 pmt threshold at $280 pmt for indicative pricing. There have been reports of premium paddy sales leaving from the South Louisiana Rail Facility because of their higher quality and ability to provide IP rice to customers. This is proving to be the only effective long-term strategy that is offering a consistent premium in the marketplace.
We touched on a subject last week that we expect will garner much more attention in the near future, and that is the fact that India’s level of subsidies – and thus production and exports – is creating a fundamental change for the global rice market. The involvement of the Indian government is so integrated in India’s rice economy that it is entirely distorting the global supply flows. This is therefore requiring other governments (Thai, Viet, U.S., Paki to name a few) to take an outsized role in their respective rice industry through subsidies in production and export local price supports. The simple truth is that India is making rice production economically unviable for the rest of the globe. Therefore, governments will be forced to enact short term stimulus packages to ensure food production continues, but the longer-term strategy will require a coalition of countries to come together to the WTO to speak out against India’s unfair trade practices… and then the WTO will have to do something about it.
The pricing matrix continues to defy expectations and keep trending downward. Thai prices are reported at $345 pmt, Viet at $365 pmt, and Indian rice at $355 pmt. In the Western Hemisphere, U.S. rice sold to Iraq at roughly $550 pmt FOB NOLA, but indicative pricing is closer to $570 pmt. Brazil is registering at $465 pmt, Uruguay at $450 pmt, and Argentina at $385 pmt. ∆
US RICE PRODUCERS