El Niño increases supply pressure
According to the latest report from Vietnam Food Association, the world rice market is entering a phase with many intertwined influencing factors. White Rice Oryza Index (WRI) ended the second week of August 2026 at US$436/tonne, up US$2/tonne from the previous week, up US$5/tonne from the previous month and US$9/tonne higher than the same period last year. Meanwhile, price of 5% broken white rice from some major rice exporting countries showed mixed trends.
According to weekly data, price of Thai 5% broken white rice was approximately US$452/tonne, down US$3/tonne from previous week but still US$88/tonne higher than the same period in 2025. Price of 5% broken rice was approximately US$362/tonne, slightly down from the previous week but US$19/tonne lower than the same period.
FAO rice price index for July 2026 reached 108.4 points, almost stable compared to the previous month but 4.7% higher than the same period in 2025. Indica rice prices were supported by relatively good demand and tight supply, while Japonica, glutinous and fragrant rice faced pressure due to weaker demand.
Outlook for rice market in final months of the year is significantly impacted by weather developments. New studies show that rising temperatures could reduce rice yields more significantly than previously predicted, especially during flowering and grain-filling stages. Major rice-producing countries in Asia such as India, Vietnam, Thailand, Indonesia, Bangladesh and China are assessed to be at risk. In Southeast Asia, El Niño is predicted to bring hotter and drier weather than normal during August-October 2026, increasing risk of drought and water shortages in some rice-producing areas of Thailand, southern Vietnam and Cambodia.
GEOGLAM also warns that the combination of El Niño and positive IOD could worsen drought conditions in South Asia and Southeast Asia in the coming period. This development necessitates that rice-producing and importing countries be more proactive in managing water resources, stockpiling and ensuring supply.
In Indonesia, rice production for the first nine months of 2026 is projected to reach approximately 28.71 million tonnes, nearly the same as the previous year. Despite predicted El Niño weather causing drier-than-normal conditions, Indonesian National Logistics Agency (Bulog) stated that supply remains secure.
Bulog has purchased approximately 3.5 million tonnes of paddy rice, reaching 87.4% of its target, while government rice reserves stand at nearly 5.4 million tonnes. Total supply is estimated at around 25-26 million tonnes, exceeding annual consumption of approximately 22 million tonnes. Indonesia plans to continue purchasing from farmers until the end of the year to bolster its reserves.
In the Philippines, the government has also chosen to maintain rice imports instead of imposing a temporary import ban, given the risk of El Niño impacting domestic production. As of July 1, 2026, the Philippines' rice reserves reached 2.51 million tonnes, a 10.1% increase year-on-year. The government also increased National Food Authority's (NFA) procurement budget to 20 billion pesos, aiming to purchase 500,000 tonnes of paddy rice at higher prices to support farmers.
These moves indicate that major rice-producing and consuming countries are prioritizing strengthening their reserves to mitigate impact of external shocks. Notably, the Philippines forecasts that its rice production in the third quarter of 2026 could decrease by approximately 700,000 tonnes if El Niño intensifies.
Countries proactively strengthening food security
Faced with climate risks and trade fluctuations, many countries in the region are implementing solutions to enhance their self-sufficiency in supply. Malaysia currently has approximately 1.237 million tonnes of rice in reserve, including 200,000 tonnes of national buffer reserves and 1.037 million tonnes of commercial reserves, enough to meet domestic needs for at least six months. The country aims to increase its rice self-sufficiency rate to 80% by 2030, while expanding the use of drought-resistant rice varieties, implementing a five-crop-per-two-year program, and upgrading its irrigation system.
Bangladesh is focusing on developing rice varieties that are resistant to drought, floods, frost and salinity. The government is collaborating with the Bangladesh Rice Research Institute (BRRI) and the International Rice Research Institute (IRRI) to develop high-yielding, short-duration, nutrient-rich varieties that are better adapted to climatic conditions.
Meanwhile, Thailand is seeking to expand its export markets as competition in the global rice market intensifies. Its rice exports in the first half of 2026 declined sharply in both volume and value. Hom Mali rice is also facing competitive pressure from lower-priced Cambodian jasmine rice. Thailand plans to strengthen government-to-government (G2G) rice trade negotiations with China, while also promoting exports to the Philippines, Malaysia and other markets. Despite unfavorable export results in the first few months of the year, the country maintains its target of exporting 7 million tonnes of rice in 2026.
In contrast to Thailand, Cambodia recorded a strong increase in export. In July 2026, Vietnam exported approximately 77,000 tonnes of rice, an increase of about 26% compared to the previous month. Cumulative export for the first seven months reached approximately 707,000 tonnes, an increase of about 68% compared to the same period last year. Fragrant rice accounted for nearly 60% of total export. Cambodia is boosting export to the Philippines thanks to advantage of competitively priced long-grain white rice, thereby expanding its market and reducing dependence on traditional markets.
For Vietnam, global market developments show that weather, supply and demand factors are increasingly directly impacting rice prices. With El Niño and other climate factors potentially continuing to put pressure on production in the region, proactively managing water resources, improving quality, diversifying markets and increasing value of rice grains will be crucial for maintaining competitiveness.
Besides weather, geopolitical instability also continues to be a factor to monitor. The Russia-Ukraine conflict is disrupting transportation in the Black Sea region, increasing shipping and insurance costs, thereby potentially impacting global food trade flow.
Global rice market in the final months of 2026 may continue to fluctuate under combined effects of El Niño, climate change, water shortages and geopolitical instability. In this context, trend of increasing reserves, developing climate-adaptive rice varieties and diversifying supply sources is being chosen by many countries as a solution to ensure food security and reduce risks from market fluctuations.

Source: Vitic/ congthuong.vn