The global rice market is currently experiencing a significant downturn in prices, reaching multi-year lows that are particularly beneficial for major importing nations, including Nigeria. This slump follows a period of volatility and export restrictions, and its implications are being felt across the supply chain, from farmers in Asia to consumers in Africa.
Recent data from a Reuters poll highlights the extent of this market correction. April saw a notable decline, just one month after India, a dominant player in the global rice trade, removed the last of the export curbs it had implemented in 2022. This policy shift immediately impacted prices, sending Indian parboiled rice export prices to a 22-month low. Similarly, prices in Thailand dropped to their lowest point in over three years, while Vietnam's prices sank to near five-year lows.
Factors Behind the Price Decline
The primary catalyst for this sharp decline is the lifting of export restrictions by India. By allowing all grades of rice back onto the international market, India has intensified competition among exporting nations. This move follows a period where India's curbs inadvertently boosted exports from rival countries.
Industry experts and traders suggest that after falling by nearly one-third from their 2024 peaks, prices have found a floor, which is expected to hold for the remainder of 2025. This stability is largely attributed to significant surpluses in all major exporting countries. B.V. Krishna Rao, president of the Rice Exporters Association, commented, "Even after the recent significant correction, we don’t expect a price rebound. The supply glut will likely prevent prices from increasing." The association anticipates prices for 5% broken rice will fluctuate within a narrow $10 range around $390 per ton for the rest of the year, unless unexpected weather events like the monsoon significantly impact production.
Supporting the outlook for abundant supply, India’s state-run weather office has forecasted above-average monsoon rains for a second consecutive year in 2025, which is expected to further boost domestic rice production. Globally, the Food and Agriculture Organization (FAO) estimates record rice output of 543.6 million metric tons in 2024/25, an increase from 535.4 million tons the previous year. When accounting for existing stocks, total global supply is projected to reach a massive 743 million tons, comfortably exceeding the expected demand of 539.4 million tons.
The substantial stockpiles, particularly in India where government warehouses held 63.09 million tons (including unmilled paddy) on April 1 – nearly five times the target level – are a major factor. With such large inventories and the prospect of increased production, buyers are under no pressure to make immediate purchases, forcing sellers to compete aggressively for market share, thereby keeping global prices depressed.
India's Resurgence and Impact on Rivals
The lifting of export restrictions is poised to re-establish India's dominance in the global rice market. The Rice Exporters Association projects Indian shipments to surge by nearly 25% year-on-year, reaching a record 22.5 million metric tons this year. This volume is expected to push India's share back above 40%, surpassing the combined exports of the next four largest suppliers: Thailand, Vietnam, Pakistan, and the United States.
The return of Indian rice to the market, initially coinciding with a weaker Indian Rupee trading around 87.2 against the dollar in March, further contributed to lower prices. However, the rupee has since strengthened to 84.55 against the dollar, and other exporting nations' currencies have also appreciated, which grain dealers note has helped prevent global rice prices from falling further.
The increased competition from India has already impacted rival exporters. Thailand's rice exports in the first quarter of 2025 fell by 30 percent to 2.1 million tons, as buyers switched to lower-priced Indian alternatives, according to Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association. Trade bodies in Thailand and Vietnam anticipate their respective exports for 2025 to drop by 24 percent and 17 percent, both potentially settling around 7.5 million tons.
Benefits for Importers, Challenges for Farmers
The beneficiaries of this global price slump are predominantly price-sensitive consumers in major importing regions, including African nations like Nigeria, Senegal, and Ghana, as well as countries such as the Philippines, Indonesia, and Saudi Arabia. For countries like Ivory Coast, where rice demand is growing due to population influx, lower prices provide much-needed relief. As Rao of the Rice Exporters Association remarked, "India’s export curbs were a bonanza for other Asian suppliers in the past two years. Now, the resumption in exports would make buyers happy with the moderation in prices."
Conversely, the lower global prices are likely to exacerbate the financial struggles of farmers across Asia, who produce nearly 90 percent of the world's rice and often already face meager earnings.
Nigeria's Position and Policy Response
Nigeria stands as a significant rice-importing country, though ranking 158th globally in 2023 with imports totaling $7.26 million. Its primary sources that year were India ($5.9M), followed by the United Arab Emirates, Thailand, Benin, and the United States. Notably, India, the UAE, and Thailand were the fastest-growing origins for Nigerian rice imports between 2022 and 2023.
Nigeria has historically implemented policies aimed at boosting domestic rice production and limiting imports. In January 2022, the Federal Government banned the import of parboiled rice through seaports. However, facing rising food costs, the country reportedly received a shipment of brown rice from Thailand in January 2025. This consignment of 32,000 tons was facilitated under a tariff moratorium issued the previous year on various food crops, including rice, aimed at alleviating consumer hardship.
Despite the duty waiver, large-scale purchases have reportedly remained limited due to concerns about negatively impacting local rice farmers. As Adrian Beciri, CEO of DUCAT (which facilitated the shipment), stated, "Nigeria has been working hard to find solutions to broaden and strengthen its food supply accessibility." The current low global prices present a complex challenge for Nigeria, balancing the immediate need to lower food costs with the long-term objective of protecting and growing its domestic agricultural sector.