El Niño Takes Center Stage As Rice Markets Strengthen

US RICE PRODUCERS

KATY, TEXAS

Rice harvest is in full swing, and the short crop has firmly embedded itself in the pricing complex. Milled rice quotes have climbed to as high as $ 675/mt, while paddy prices are approaching $ 400/mt. Cash prices on the ground are finally active, with premiums offered for rice with milling qualities 55+ and in the $15/cwt price range. Indications show that prices will hold, with further upside a true possibility.

The real story right now is the El Niño, but we want to make sure our readers know that means different things to different people. For example, CA has already declared a State of Emergency due to the coming El Niño because of wet weather. However, in India, the risk is that the El Niño brings exceptionally dry conditions. Below is a table that helps lay out how regions are impacted by the El Niño, and what that means for their respective rice crop. The moral of the story is two-fold: El Niño = DRY weather in Asia and WET weather in the Western Hemisphere, and the true supply shock won’t be realized until Feb-May of 2027. A few other key items to consider from previous El Niño cycles are that Indonesia imported 3MMT in 2023, while Thailand told producers to skip their second crop because of dry conditions. It is likely that we can expect something similar this year.

In Asia, prices remain firm overall, though Thailand dropped from $480pmt to $470pmt. Vietnam held steady at $425pmt, and India at $380pmt. It would appear that the true pressures from the El Niño haven’t begun pressing prices yet, but it is bound to happen as we progress deeper into Q4.

The weekly USDA Export Sales Report shows net sales of 54,200 MT this week, up 49% from last week and 31% from the prior 4-week average. Exports of 79,200 MT were up 97% from the previous week and 81% from the prior 4-week average.   ∆

US RICE PRODUCERS