This week, rice export prices from Thailand fell to their lowest point in more than three years, impacted by a market oversupply and newly imposed U.S. tariffs by President Donald Trump. At the same time, India’s export prices approached a two-year low due to subdued global demand. Despite short-term challenges, Indian exporters remain optimistic about retaining market share in the U.S. due to basmati rice’s strong reputation.
Rice export prices from Thailand have plunged to their lowest levels in more than three years this week, driven by a combination of market oversupply and new import tariffs imposed by U.S. President Donald Trump. Meanwhile, Indian rice prices have dropped to near two-year lows due to weak global demand.
The United States has introduced a flat 26% tariff on all Indian exports. In comparison, Thai goods will face a 36% tariff, while exports from Bangladesh and Vietnam will be taxed at 37% and 46%, respectively. Thailand’s 5% broken rice is now priced between US$ 395 and US$ 400 per metric ton—its lowest level since January 2022.
According to a trader based in Bangkok, “Demand has disappeared following the U.S. tariff announcement and persistent oversupply.”
Another trader noted that the market remains sluggish as buyers hesitate to make new purchases. The new tariffs are expected to have a negative impact on Thai rice exports, especially as India’s cheaper prices could further pressure Thai rates.
India’s 5% broken parboiled rice dropped to US$ 392–US$ 400 per ton, its lowest in nearly 22 months, as demand from African buyers waned amid plentiful supply. The country’s 5% broken white rice is currently quoted at US$380–US$385 per ton.
Many overseas buyers are said to have suffered losses due to the recent sharp price declines and are now hesitant to place new orders.
In Vietnam, 5% broken rice was offered at US$ 405–410 per ton. Prices inched higher as the main winter-spring harvest comes to an end. The newly imposed U.S. tariffs are not expected to have a direct effect on Vietnam’s rice exports. However, domestic prices are on the rise, especially for fragrant rice varieties. Meanwhile, rice prices in Bangladesh remain high despite government efforts to increase imports, continuing to strain household budgets and hit consumers hard.
India is a leading exporter of Basmati Rice to the global market. The country has exported Basmati Rice worth US$ 5837.12 Million to the world during FY24. Major export destinations (2023-24) included Saudi Arab, Iran, Iraq, UAE, USA, and Yemen Republic. (India also exported Non-Basmati Rice worth US$ 4570.06 Million during FY24.)
Table: Top 5 destinations for India’s rice export (2020-2024)
Source: ITC Trade map; (Value in US$ Million)
During 2024-25 (April-December) India’s rice exports stood as: Non-Basmati Rice- US$ 4,404.98 Million, and Basmati Rice- US$ 4,322.59 Million.
According to the Agricultural and Processed Food Products Export Development Authority (APEDA), the United States accounts for 5% of India’s basmati rice exports. Between April and January of the 2024–25 period, India shipped 230,643 metric tons of basmati rice and 51,334 metric tons of non-basmati rice to the U.S. In the full fiscal year 2023–24 (April to March), India’s total rice exports to the U.S. increased by 30,444 metric tons year-over-year, reaching 234,469 metric tons.
According to Prem Garg, national president of the Indian Rice Exporters Federation (IREF), “In FY24, India exported 2.34 lakh tonnes of basmati rice to the US out of 52.4 lakh tonnes. During April-November 2024, the US accounted for 2.04 lakh tonnes of India’s 42 lakh tonnes of total basmati exports. West Asia continues to be India’s primary destination for rice exports.”
The new 26% US tariff on Indian imports, scheduled to take effect by April 10, could lead to a short-term increase in Indian rice prices—particularly basmati—but is expected to have limited long-term impact.
A leading basmati rice exporter to the US noted that the initial impact of the tariff might be tough to absorb, but does not expect long-term difficulties. Compared to competitor nations like Vietnam and Thailand, which are subject to higher tariffs of 46% and 36% respectively, India’s position remains more favourable. The exporter also highlighted that the US may face inflationary pressure in its local market due to the tariff hike.
Some Indian exporters anticipate that the impact will be shared with other exporting countries, as India’s main competitors—Pakistan for basmati rice and Thailand and Vietnam for aromatic varieties—face higher tariffs. They also believe that Indian rice will maintain its market share in the U.S., as Indian basmati has built a strong reputation among American consumers. Although some contracts and pricing strategies may be renegotiated, demand is expected to stay robust due to its ‘consistent’ quality.
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