Ep. 65 2025/26 Rice Market Outlook

00;00;24;18 – 00;00;29;27
Dr. Hunter Biram
Well, I’m your host today, Dr. Hunter Biram. And with me in the studio, I’ve got Dr. Ryan Loy.

00;00;30;00 – 00;00;31;05
Dr. Ryan Loy
How you doing, Hunter? It’s good to see you.

00;00;31;09 – 00;00;35;00
Dr. Hunter Biram
Good to see you, too. And Dr. Alvaro Durand-Morat. Alvaro, how are you?

00;00;35;01 – 00;00;37;12
Dr. Alvaro Durand-Morat
I’m doing great. Thank you. How are you guys doing?

00;00;37;14 – 00;00;42;05
Dr. Ryan Loy
Great. Great. It’s been quite a few weeks. It’s been quite a summer. And I’m sure it was the same for you as well.

00;00;42;05 – 00;00;47;08
Dr. Alvaro Durand-Morat
Yeah. Yeah. It has been an interesting summer. Interesting, definitely, marketing year for rice.

00;00;47;10 – 00;01;14;06
Dr. Ryan Loy
That’s right, that’s right. And that’s a great segue into what we’re going to be talking about today. And we’re going to be going over a recent article that Alvaro and I put together for Southern Ag today, just kind of giving a general overview of what the rice market has in store for us this year. And to kick it off, Alvaro, I just wanted to kind of give you an opportunity to kind of give some of your big talking points and where you think this market’s headed, you know, what are the differences from last year? Maybe what are some expectations going through this marketing year?

00;01;14;06 – 00;01;38;21
Dr. Alvaro Durand-Morat
Yeah I mean that’s, that’s, I think, a common question for you guys that go around the agricultural region and giving talks. I mean I got that question a couple of times over the last few weeks, like, how can we be in such a different situation this year compared to last year or the year before? Truth be told, I think the main reason is not a domestic reason, it’s an international reason, right?

00;01;38;21 – 00;02;06;11
Dr. Alvaro Durand-Morat
I mean, the international rice market changed so much. We have been talking about the India export ban and, and the impact that that had on increasing prices, which was great for our rice farmers. Right? I mean, high prices in, ‘23, ’24. Indonesia demanding so much rice, Philippines demanding so much rice. So the international market was very strong. With India, you know, kind of outside of it.

00;02;06;11 – 00;02;31;06
Dr. Alvaro Durand-Morat
Right? I mean, they still exported a lot, but less than what they could have without the export ban. And then India reverted that measure in October of ‘24. And then now the market is flooded with Indian rice with a great harvest in Thailand and Vietnam, in Indonesia. So now Indonesia is out of the market, pretty much, the Philippines imposing an import ban, a temporary import ban.

00;02;31;06 – 00;02;52;03
Dr. Alvaro Durand-Morat
And so basically we are at the other side of the coin, basically from where we were a year ago or more than a year ago, I would say a year and a half or two years ago. And so again, the US, we export about 40% of the long grain that we produce. So, you know, like it or not, the international market will get us, for good or bad.

00;02;52;03 – 00;03;14;13
Dr. Alvaro Durand-Morat
And I think this is an example where the international price is so low. I was reading, I was reading the crude report this morning, one of the sources that I read, and I was surprised to see that for this week, Thailand 5% export price for long grain, 5% broken is at $340 per metric ton. Oh wow. A year ago that price was about $500, right?

00;03;14;13 – 00;03;37;17
Dr. Alvaro Durand-Morat
So with that, it’s very hard to think that better prices are on the horizon for U.S. Rice. Because again, we compete with all that. So that’s maybe the bottom line is, there are always things to improve domestically. No, no question, right? I mean, increasing the yield, lowering the cost, improving the quality. But this situation is primarily an international market generated situation.

00;03;37;24 – 00;03;50;19
Dr. Ryan Loy
Definitely makes sense. And I really appreciate you giving us that background. One of the things you mentioned was the India rice export ban. And as I understand it, so was it they banned the export of non basmati rice or is it the opposite of what I’m thinking?

00;03;50;19 – 00;04;16;08
Dr. Alvaro Durand-Morat
It was, it was the export of non basmati. Okay. Which again is the one that that competes with our long grain rice. Okay. And again an export ban by definition should be a ban right. Like you are banned from exporting. Well India never completely banned the exports. But basically all the private sector exports were banned. The Government of India still exported I think 19 million metric tons of rice.

00;04;16;08 – 00;04;34;17
Dr. Alvaro Durand-Morat
Right. So again, if they were completely out of the market, then prices would have been so high that most likely we would be talking about a food crisis more than anything else. Right? So yeah, that is the context of India export ban is, it was of reduction in exports, not an elimination of exports.

00;04;34;17 – 00;04;40;19
Dr. Ryan Loy
Reduction, and then when they come back online, they flood the market. And then now, as I’ve heard it described many times by farmers or even others […]

00;04;40;19 – 00;04;55;13
Dr. Alvaro Durand-Morat
Actually I think we wrote another, or I wrote another southern article, that I think we talk about a couple of months ago with you guys. Again, India keeps getting record crops. They are expanding area, they are increasing yields. So you know, there is plenty of rice to go around.

00;04;55;14 – 00;05;09;02
Dr. Ryan Loy
That’s right. And one of the things you brought up, which I think is very interesting in terms of that balance in the world rice price, you know, it’s extremely low right now from the high supply, but you also don’t want to cut the supply off too much because then the high price forces, like you mentioned, a food crisis.

00;05;09;02 – 00;05;26;23
Dr. Ryan Loy
Right. You know, with rice being a food crop, a little bit different than some of our other commodities that we deal with. And so that’s, that’s really important. I’m glad you brought that up. And so we’re talking about the international markets and we’re discussing these things in terms of, you know, the farmers domestically can do everything correctly, but it’s really a function of the world’s supply right now.

00;05;26;23 – 00;05;40;16
Dr. Ryan Loy
One of the things we talk about a lot is quality and really what that means for us, you know, domestically, can you maybe just give a brief background in terms of what that means for us in terms of global competitiveness, if it does mean anything? Or what it kind of means for us domestically as well?

00;05;40;16 – 00;06;04;01
Dr. Alvaro Durand-Morat
Yeah. So again, quality. There is no one single definition of what quality means, right? I mean, what is high quality for you? It might be different from what is high quality for me, right? So we know that consumers are sovereign and they will define ultimately what they consume. And so, but, there has been clearly a shift in, I would say again, and I’m not a rice breeder, I just want to clarify that.

00;06;04;02 – 00;06;30;14
Dr. Alvaro Durand-Morat
Okay. And then I have been working on rice for over 20 plus years. And at some point back then, early 2000s, well, late 1990s, I was working on a rice breeding program in Argentina, and I remember having the U.S. varieties as the gold standard. So those were the varieties that the breeders down in Argentina were looking at as the aspiration, we want to get that quality. Well, that is not the case anymore.

00;06;30;14 – 00;06;56;25
Dr. Alvaro Durand-Morat
Today, sadly, I think varieties from Argentina, Brazil, Uruguay have better quality that serve better most of the consumers. And again, this is not, this is not a black and white, right? But is it is serving better consumers in Central America, in Mexico. And again, it’s not only about the milling quality. You know, the broken and the chalk. It is really also about the cooking quality is, you know, the stickiness.

00;06;56;25 – 00;07;21;27
Dr. Alvaro Durand-Morat
The, you know, the texture and things like that, that, you know, that seems to be driving things kind of against the U.S.. Now, again, this is price and quality both combined. But I think today, again, reading market reports, Mercosur is carrying heavily into into these, these core markets, central America, and Mexico, primarily and is doing it with lower prices and better quality.

00;07;21;27 – 00;07;24;05
Dr. Alvaro Durand-Morat
So that’s, that’s a complex scenario.

00;07;24;05 – 00;07;54;04
Dr. Ryan Loy
That’s very good. And it’s quite a time to try to navigate the rice market. It always is. I tell people that is, I feel like as soon as I understand the rice market, I’m quickly reminded that I don’t understand it at all. And it’s a very complicated, very complicated market. And it’s a very interesting one of the things that we talk about, and you had mentioned already in our, in our article was the Philippines import ban, and that is mainly just due in part to something that we’ve talked about already on this episode is really that global rice supply is putting such a damper on those domestic prices for them that they

00;07;54;04 – 00;08;05;11
Dr. Ryan Loy
want to protect their domestic consumers as well, or their domestic farmers. Is it right to say that that was kind of part of the motivation for what India was trying to do with their ban, or was that for some other reason?

00;08;05;11 – 00;08;33;11
Dr. Alvaro Durand-Morat
I would say it’s kind of the opposite in this sense, right? I mean, every time these countries interfere with policies such as import or export bans, they are trying to please someone, right? So India, many people will argue that. So the Government of India said, well, the export ban is really driven by market conditions. We fear that we would have a very low, that the monsoon season was not good enough, that the kharif crop, which is the main crop that India produces, will suffer.

00;08;33;11 – 00;08;59;02
Dr. Alvaro Durand-Morat
And therefore we need to protect our consumers. Price inflation was rising. Rice prices in India were going up. That’s not good for consumers when you know, rice is your main staple. But also there were state and presidential elections that year, right? So of course, if prices go up, inflation and all that scares people and so many experts would say these were completely politically driven reasons.

00;08;59;05 – 00;09;18;22
Dr. Alvaro Durand-Morat
I mean, there was no good market support for that measure. So in the case of India, again, protect consumers. Why? Because if you ban exports you get more rice in the domestic market. That put downward pressure on prices. That didn’t happen very well in India, but nevertheless, that was the intended goal. In the Philippines, is quite the opposite.

00;09;18;22 – 00;09;47;28
Dr. Alvaro Durand-Morat
Right? So the Philippines, you know, most of the, most of the farmers have rice farmers, right? And they are politically important. They can swing an election one way or another. And so they have been complaining for a long time since the Philippines actually moved to a tariffication schedule, I believe, in 2019, before the Philippines had a system of tariff rate quotas, where it was, you know, the amount of importation was fixed, but they move away from that and they implemented an importer.

00;09;48;01 – 00;10;08;03
Dr. Alvaro Durand-Morat
And so imports have been growing and that’s put downward pressure on domestic prices. And that hurts producers. And therefore the government wants to please the producers with this measure. And so the ban runs through the harvest season. So when farmers harvest and go to the market, the idea is to remove imports from that so prices go up to benefit farmers.

00;10;08;03 – 00;10;20;14
Dr. Alvaro Durand-Morat
And then, you know, everybody expects this measure to be removed or eliminated, I believe by the end of December, if I remember correctly. But again, it’s a short term thing to help farmers during harvest to get better prices.

00;10;20;14 – 00;10;55;02
Dr. Ryan Loy
That makes sense. Thank you so much for explaining that. I think it’s very important for our listeners, and not only myself, to understand exactly why those export bans occur and how this international rice market and how we play into it as Arkansas farmers. One last thing I’ve got for you, Alvaro. You know, one of the things that we mentioned in our article was that beginning stocks are up significantly year over year, mainly driven by long grain rice beginning stocks, the increase in that. Given that we have such large carryover and we have high beginning stocks, we’ve got a price falling significantly year over year, due in part from the high stocks, but also maintaining price

00;10;55;02 – 00;11;05;22
Dr. Ryan Loy
competitiveness. What kind of opportunities do Arkansas farmers have in this market this year and what, some of those things that maybe you can see into the near future in terms of opportunities for us?

00;11;05;22 – 00;11;29;14
Dr. Alvaro Durand-Morat
It is, it is a hard year. No, no question about it. I know our farmers know it very well. Right? I mean, there has been a lot of reporting about the dire situation and, you know, bankruptcies and things like that, which, again, are not very encouraging. To me, the key here is, you know, although we had, we had a shorter crop this year than, than last year because of the higher beginning stock.

00;11;29;14 – 00;11;52;24
Dr. Alvaro Durand-Morat
Our supply basically remains the same, right, relative to last year. So we have plenty of rice to sell. So I think the strategy has to be, you know, we need, we need to move that rice. We need, somehow, and again, of course this is very easy to say but hard to do. If we don’t do that, we will start next year with a higher, maybe initial stock and more downward pressure.

00;11;52;24 – 00;12;12;22
Dr. Alvaro Durand-Morat
Right. So again, I know our traders, I know where millers and all the supply chain is looking for those opportunities. But again, it is a difficult year. I think Iraq, if we can renegotiate the memorandum and get it through and get shipments going as we did last year. So Iraq ended up being a very, very important market for us.

00;12;12;22 – 00;12;34;11
Dr. Alvaro Durand-Morat
That would be vital, right? I mean, but again, that is the way I see those sales are more politically driven than market driven. Right? So if the main supplier to Iraq by far is Thailand, and Thailand is much more price competitive than us. So again, these are kind of politically driven, government driven trade. But we need that. We need Iraq.

00;12;34;11 – 00;12;55;13
Dr. Alvaro Durand-Morat
We have lost Venezuela because of many reasons, including political reasons. Haiti, if you think about relying on Haiti as your main trading partner and you talk about risk, then tell me more about it, right? I mean, that’s very risky. But that is the key market for our milled rice for sure. And Pakistan is gaining traction there.

00;12;55;13 – 00;13;18;02
Dr. Alvaro Durand-Morat
So, you know, any measure in terms of financing terms, anything that can be done should be done to keep that market going. Mexico again, Mercosur will run out of rice at some point, right? So the numbers coming down from Mercosur, again, Mercosur is starting to plant the crop. Everything points to significant decreases in area. So Mercosur will have less rice coming in the spring.

00;13;18;02 – 00;13;41;05
Dr. Alvaro Durand-Morat
So maybe again a strategy will be okay. We need to hold because Mexico will need rice then. And Central America will need rice. All this this is what the industry is doing. Day in and day out, trying to find the best, the best business, right? So, Colombia is still there is healthy. But but again these the access we have is a number set by the TRQ we have with them.

00;13;41;05 – 00;13;58;07
Dr. Alvaro Durand-Morat
Right? So again there is nothing creative to do there. But I will say again for the industry, I know this is hard, but I will say it anyway. So the hard times are maybe the best times to really get good at it. Right? Okay. What do we need to do to lower our cost, to increase our productivity, to increase our quality?

00;13;58;08 – 00;14;25;21
Dr. Alvaro Durand-Morat
I know the industry is thinking about all this, but again, when the pressure is on, we do our very, very best. I think quality is something that comes to mind. And again, along those lines, we have been presenting, submitting grants to NIFA to get actually some money to do research on that area in particular, like marketing and quality and how quality impacts our market shares because yeah, we talk a lot about it, but we don’t have very good information, objective information.

00;14;25;21 – 00;14;42;27
Dr. Alvaro Durand-Morat
How much, what is the impact, right? So because ultimately if you want to improve the quality you need to make an investment and what will be the return on that investment is, okay. How much market you can retain or increase based on that quality gain. Right. So that’s what we are trying to get with these proposals.

00;14;42;27 – 00;14;49;14
Dr. Alvaro Durand-Morat
But again, I know that’s a long answer to a simple question, but there is, I think there is no simple answer to that.

00;14;49;17 – 00;15;09;07
Dr. Ryan Loy
That’s right. No, there’s no simple answers when it comes to the rice market, right? And I really appreciate you going through and explaining that in terms of where you see this heading and the things that, domestically, we need to focus on and improve. I know that Hunter and I really appreciate all the work you do. And every time you’re willing to come up and talk to us on this show about the rice market, because it is complicated.

00;15;09;07 – 00;15;23;27
Dr. Ryan Loy
And, you know, we need you to help kind of, get through this and, and, and make sense of it all. So we really appreciate it, Alvaro. And if there’s anything else that you’d like to say, I’d give you the floor now. Otherwise, we really appreciate you coming on today and donating your time.

00;15;23;29 – 00;15;45;09
Dr. Alvaro Durand-Morat
Honestly, I appreciate you guys, because, again, you are out there facing the stakeholders and taking their suggestions and, and connecting us to them, right? And so that’s very important, at least for me to know what is going on. And so I appreciate your help. And again, I am always happy to talk about rice. Believe me, my wife is not happy when I start talking about rice.

00;15;45;09 – 00;15;53;03
Dr. Alvaro Durand-Morat
So, anytime I have any people that want to talk about rice, that’s what I, what I want to do. So, I am available anytime.

00;15;53;09 – 00;15;55;28
Dr. Ryan Loy
Well, thank you very much, Alvaro, and we really appreciate it.

00;15;55;28 – 00;15;58;21
Dr. Hunter Biram
All right. With that, stay tuned for the market report. Thanks.