Fertilizer is expensive, the weather is dry! Asian rice prices soar to a one-year high.

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The outlook for harvests in major global producing regions has worsened, sparking market concerns, and the benchmark rice price in Asia has risen to its highest point in over a year.

According to a Bloomberg report on May 20, data from the Thai Rice Exporters Association shows that, as of this Wednesday, the price of Thai white rice (5% broken) increased by 4% week-on-week to $446 per ton, marking a new high since February 2025. This is the third consecutive week of price increases. The rise is driven by expectations of tightening global rice supply, after the U.S. Department of Agriculture predicted that global rice production in 2026-27 would see its first decline in 11 years.

The drop in output expectations is not without cause. On one hand, surging fertilizer and fuel prices have greatly pushed up the cost of rice cultivation, leading to concerns that some farmers in Southeast Asia may abandon planting this season. Shipping in the Strait of Hormuz has come to a near standstill, disrupting the flow of key fertilizer products: the world's largest urea production facility in Qatar has halted supplies, and the distribution of sulfur and ammonia, core raw materials for fertilizer, has also been severely limited.

On the other hand, India, the world's largest rice exporter, is facing drought risks, with monsoon rains expected to be below average. The country's rice supply is highly dependent on the annual rainy season, while the upcoming El Niño weather pattern is expected to further suppress rainfall.

Although current wholesale prices remain below the multi-year peak seen in 2024, the upward trend has already had a significant impact on countries like the Philippines—rice prices in April rose 13.7% year-on-year. Meanwhile, Chicago rice futures this week hit their highest level since August, further confirming market concerns about the supply outlook.

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