Asian rice price climbs near 2-year high in inflation threat

A benchmark Asian rice price climbed to the highest in almost two years, threatening to accelerate food inflation as the El Nino weather pattern disrupts production of the staple grain.

Farmers across much of Asia are in the midst of harvesting the grain, and drier-than-usual weather has proven a hurdle for crops in growers like India, the world’s leading exporter. Global production is expected to decline this season for the first time in over a decade, the US agriculture department forecasts.

That’s pushing prices higher, with 5% broken white rice from Thailand — another major shipper — rising to US$499 a tonne as of Wednesday, the highest since December 2024, according to the Thai Rice Exporters Association. Rough rice futures in Chicago are also up more than 80% since the start of the year.

Those gains come even as prices decline for other major grains, including corn and wheat. The El Nino weather phenomenon underway is one of the most powerful on record and linked to drier conditions across much of South and Southeast Asia, where more than half the world’s rice is grown.

In Thailand, the main production risk is for the off-season crop, which relies on irrigation, the USDA’s Foreign Agricultural Service said in a recent report.

While higher wholesale prices take time to feed through to retail markets, there are already signs of rising costs in some places. Rice prices in the Philippines, the No. 1 importer, jumped 21% in October versus a year earlier, according to government figures released Thursday.

The grain is a dietary staple across swathes of Asia, Africa and the Middle East. The UN Food and Agriculture Organization also expects a drop in world output during the 2026-27 season.