World rice market update: more trade, better weather, lower prices

by David Dawe, Valerien Olivier Pede and Ronald Jeremy Antonio

Good news: the recent developments in the global rice trading environment and improved weather conditions have lowered world market prices. As these factors lead to lower domestic prices, consumers will find it easier to afford a healthy diet.

Improved trade

World prices are now back to levels last seen before India’s restrictions were imposed in July 2023 (see the latest data point in Figure 1). This shift is largely influenced by the major rice trade policy changes in both the world’s largest exporter (India) and the world’s largest importer (the Philippines) in the past months.

Beginning in late September and continuing over the succeeding weeks, India removed nearly all restrictions on rice exports in the face of large domestic stocks and prospects for an excellent forthcoming crop. These restrictions included a ban on non-basmati non-parboiled rice exports (with some exceptions for countries that needed imports for food security), a minimum export price on basmati rice and an export tax on parboiled rice, paddy, and husked rice.

Meanwhile in July, the Philippines lowered tariffs on rice imports from 35 per cent to 15 per cent, in response to elevated domestic rice prices.¹ However, the global market reaction to the lowering of tariffs in the Philippines was muted – in fact, Thai export prices fell when the lower tariffs took effect. In contrast, the global market reaction to the relaxation of India’s rice export restrictions was swift and unequivocal: Thai export prices recorded a 9 per cent drop in the week immediately after the policy change.

The stronger market reaction to the changes in India’s trade policy can be attributed to India’s significant share of world rice exports – estimated at about 40 per cent – which is much larger than the Philippines’ share of world rice imports (based on USDA 2025 trade projections). Thus, India has more influence on the world rice market than does the Philippines, even if the latter is the world’s largest importer. Furthermore, the short-term impact of the lower Philippines’ tariffs was clouded by farmers’ unsuccessful appeals for a temporary restraining order to nullify the executive order to lower tariffs.