Global grain prices have surged in 2026, driven by supply concerns and adverse weather conditions. Rice futures have soared 80% this year, reaching their highest levels since July 2024. Wheat and barley prices have also climbed, gaining 32% and 42%, respectively. The rise in rice prices is particularly notable, with export prices across Asia hitting one-year highs.
India, which accounts for nearly 40% of global rice exports, is facing a significant production decline. The country's rice output is expected to drop by 7 million tonnes to 147 million tonnes this season due to lower sowing acreage and damage to crop yields. Sowing has already decreased by 3.5%, raising concerns over domestic supplies. Domestic rice prices in India have also increased, with retail prices of basic varieties rising by 10-20% over the past year and premium varieties becoming 15-25% more expensive.
Several factors are contributing to the rise in rice prices, including deficient monsoon rainfall, higher minimum support prices, rising cultivation and logistics costs, and demand from the ethanol industry. Seasonal demand during festival and wedding periods has also added to the pressure. Other Asian markets, such as Vietnam and Thailand, are also experiencing higher rice prices.
The rally in grain prices extends beyond rice, with wheat and corn recording strong gains. Wheat futures have climbed to their highest levels since August 2023, supported by disruptions in the Black Sea region and dry weather in North America. Corn prices have reached three-year highs due to hot and dry conditions in the European Union and weaker yield prospects in the US. Barley and oats have also seen substantial gains, reflecting the broader rise across global grain markets.