Rough Rice Prices Explained

Rough rice prices experience a significant shockwave as top producers impose on cutting exports due to poor harvest because of extreme weather patterns. This and other factors highly affect the price of rough rice.

Why are rough rice prices fluctuating?

1. Rice Inventory

India, the world’s second-largest rice exporter and responsible for 40% of global rice trade, imposed a non-basmati white rice export ban on July 20, 2023. 

This is the second rice export ban after the country announced the cutting of broken rice exports last September 2022. 

The rising food prices, high inflation, and the fear of rice shortage were the top reasons coupled with the threat of  El Niño( the unusual warming of surface waters in the eastern Pacific Ocean ) which will cause dry spells across Asia, specifically in Southeast Asia. 

Additionally, China’s grain-producing north-eastern region ( another top rice exporter ) has been constantly hammered by heavy rains and floods which resulted in a reduced 106.80 million metric tons of exports.

Furthermore, the adverse weather conditions in Vietnam and the shrinking of its land for rice growing production lessened its production by 1%.

Thus, these multiple factors highly influence rough rice prices and will likely continue until 2024 as experts predicted that El Niño will last 9 – 12 months.

2. Climate Conditions

Drought and heat really affect the production and supply of rice as rice is very sensitive to water levels.

In response to this, some rice growers choose another crop that is not highly reliant on water supply. 

For example, the consecutive extreme weather across Arkansas and California made rice farmers opt for more lucrative crops such as soybean and corn. 

While this balances the supply for these crops, it contributes to the increase of rough rice prices and demand as rice production lowers due to crop switching.

3. Black Sea Grain Deal

The Black Sea Grain Initiative is an agreement among Russia, Ukraine, the UN, and Turkey allowing Ukrainian trading vessels carrying grains such as rice, wheat, and fertilizers to pass through Black Sea waters without military threat. 

In exchange, the West would lift Russian agricultural sanctions.

The deal lasted for almost 10 months until Russia ended it in August 2023 with the argument that the West didn’t honor its agreement on lifting some agricultural and trading sanctions.

Thus, the rough rice price stabilizer turned out to be another economic problem that added pressure to the Asian rice trouble.

Which variables impact the price of rough rice?

• Rice Inventory
• Climate Conditions
• Black Sea Grain Deal
• Crop Conditions
• Trade Policies

Where does rough rice come from?

Also known as paddy rice, rough rice is a vital commodity that plays a significant role in global food security. It is a coarser product than brown rice which is the rice grain without the hulls but still contains the bran. 

Paddy rice is less used for animal feeding than other grains as it is often more expensive and less available. Additionally, it has higher fiber content compared to other grains. 

The earliest evidence of rice domestication comes from China. Archaeological sites in the Yangtze Valley yielded rice remains that date back to 8,000-9,000 years ago. 

From China, its cultivation spread to other parts of Asia including India, Japan, and Southeast Asia.

Trading relationships spread rice domestication across Africa, Europe, and the Americas. It reached Europe in the Middle Ages and the Spanish and Portuguese introduced it to the Americas in the 16th century.

The process of harvesting rough rice involves the following steps:

1. Reaping

Using a sickle or a combine harvester, the rice plants are cut at the base of the stem.

2. Threshing

The cut plants are threshed to separate the grains from the straw by beating the rice plants with sticks, trampling them underfoot, or using a threshing machine.

3. Winnowing

To remove the chaff and other impurities, the threshed rice is sifted by blowing the rice grain in the wind or using a winnowing machine.

4. Drying

The rice grain is dried to a moisture content of 12-14% by spreading the rice grain on a tarp or in a drying bin.

5. Storage

The ideal rice storage for the dried grain is a cool and dry place.

What is the future price and season of rough rice?

The rough rice season in the top rough rice-producing countries varies depending on the climate and rice varieties. 

1. China

The world’s leading producer of rice counts June to October as their rough rice season.

The main rice-growing regions in China are the Yangtze River Delta, the Pearl River Delta, and the southern provinces of Guangxi and Yunnan.

2. India

The rough rice season of the second-largest producer typically runs from July to September.

India’s rice regions are the Ganges River plain, the Brahmaputra River Valley, and the southern states of Andhra Pradesh and Tamil Nadu.

3. Indonesia

Indonesians plant and harvest their rough rice in the lowlands of the Javanese plains, the Sumatran plains, and the Kalimantan from November to March.

4. Bangladesh

Bangladesh still thrives to the top though the country frequently faces floods and heavy rains which damage its rice crops. 

Bangladesh’s rough rice season starts in April and ends in July. The main rice regions in Bangladesh are the Ganges River Delta and the Brahmaputra River Valley.

5. Vietnam

The Mekong River Delta and the Red River Delta are the top rice growers in Vietnam which offer vast green rice plantations from September and plenty of harvest in December. 

Overall, the rice market outlook in 2030 is positive as the global rice consumption with a slower production rate will increase by 10.5% in 2030 resulting in a price estimation of $492 per metric ton.