Rice Prices Explained

As you can see rice prices are fluctuating. But why is that? And is there a way to predict the price of rice?

Why are rice prices fluctuating?

Rice prices never fail to show their volatility in the market as it is one of the established commodities in the market. Here are the several factors of its value variation:

1. Weather Conditions

Rice cultivation relies heavily on weather conditions. The top rice producers in the world are located in Asia which is mostly visited by strong typhoons from the Pacific which bring excessive flood that damages rice crop.

This alone explains the changeable rice cost in the market as weather disturbances reduce optimal rice production.

2. Demand Growth

As the population increases, so does demand accelerate. Asia as the top rice producer also holds the most populous continent. The growing population stretches rice capacity limiting production and import which influences the rice cost in the market.

3. Oil Prices

The rapid increase of oil prices in the global market drives energy costs for rice production.

4. Reduced Government Subsidy for Agricultural Research and Development

Over the years, the agricultural sector remains to be underinvested as government agencies claim that there is plenty of rice production that could suffice for the coming years however, data results say otherwise.

5. Production Cost

The increasing value of the seed, fertilizer, and labor shape rice yield making it one of the causal factors for rice price.

Which variables impact the price of rice?

• Supply and Demand
• Government Policies
• Energy Prices
• Weather Conditions
• Global Economic Conditions
• Consumer Preferences

Where does rice come from?

Believed to be originated in Southeast Asia from the Graminaceae (grass) family thus, speaks to why most of the rice producers are from Asia. Although cultivated around the world, rice growth requirements require average sunlight exposure, cooler nights, plenty of water, and plain land for the water drainage system. 

Rice types in the US come in three forms; long, medium, and short. Typically cooked dry and separated. Arkansas is known for long-grain rice production. While California is the main producer of medium-grain rice, it also grows short-grain rice exclusively. 

US rice is cultivated in irrigated fields which proves to be effective as they achieve the highest yield in the world.

When is the rice season?

Rice season in the US starts from April to October.

Southern farmers from Arkansas, California, Louisiana, Mississippi, Missouri, and Texas slowly prepare their fields in late winter and rice planting occurs in early spring. Seedlings develop and reach maturity in the summer months and the harvest season follows in September or October.