INTERVIEW: Thai rice exports seen recovering in H2 2026 if Middle East tensions ease

Thailand's rice exports are likely to recover in the second half of 2026 if geopolitical tensions in the Middle East ease, while Thai 5% broken white rice prices are expected to trade within a relatively narrow range as adequate domestic stocks cap gains, Mohit Agarwal, country head of agri-business firm Olam Agri for Vietnam and Thailand, said in an interview with Platts, part of S&P Global Energy.

"I would put a $10 to $15 upside or a $20 downside, but not beyond that," Agarwal said, referring to Thailand's 5% broken white rice prices. "I am not looking at a $50 kind of change, at least at this point."

Platts assessed Thai 5% broken white rice at $416/mt FOB May 14, up $24/mt month over month.

Rising fertilizer, freight, and packaging costs have also contributed to higher export offers, Agarwal said. Thailand saw production costs increase by around 4%-5% during the March-April harvest, with government fuel subsidies helping offset part of the increase, while Vietnam experienced a sharper rise in costs as its winter-spring crop coincided with elevated fertilizer prices.

Thailand's rice exports fell 25% year over year over January-April, according to USDA data, but Agarwal said the decline was largely due to lower purchases from Iraq, Thailand's largest buyer over the past three years, as well as reduced buying from China and the US.

"The drop is predominantly coming from Iraq," he said. "Historically, Iraq buys close to 900,000 mt to 1 million mt a year, and that demand has not really come in."

Agarwal said the decline should be viewed as a timing issue rather than a structural loss of competitiveness, noting that Thailand continues to maintain a differentiated position in markets that value its quality profile.

Agarwal said Thai exports could recover later in the year if geopolitical tensions in the Middle East ease, helping reduce freight and packaging costs and revive demand from key markets.

"If the Middle East situation gets better, and we are all hoping for that to happen soon, that should bring some decent revival to Thai exports," he said.

Vietnam prices supported

Vietnam's rice prices are expected to remain well supported until the arrival of the summer-autumn crop in July, with demand from the Philippines likely to determine the market's next direction, Agarwal said.

Platts assessed Vietnamese 5% broken white rice at $395/mt FOB on May 14, up $25/mt month over month.

The country should have enough stocks to bridge the supply gap, but fresh buying from the Philippines will be crucial.

"If the Philippines continues buying at current spot levels, the market has potential to go up," Agarwal said. "If demand goes down, volatility could come down dramatically."

Agarwal described the recently announced Vietnam-Philippines rice supply arrangement as a directional agreement rather than a firm pricing mechanism, noting that details regarding participating importers and exporters remain unclear.

Philippines imports unlikely to fall

Despite repeated policy changes and government efforts to manage domestic rice prices, the Philippines is unlikely to significantly reduce imports, he said.

Vietnam shipped around 1.2 million mt to the Philippines through April, and Agarwal said imports are likely to remain at least around the government's previously indicated pace of 300,000 mt/month, equivalent to 3.6 million mt annually.

The Philippines remained the largest importer of Vietnamese rice in 2026, importing 1.19 million mt in the first four months, down 20% year over year, according to Vietnam Customs data.

"The number which the government had put earlier of 300,000 mt a month, leading to 3.6 million mt, looks most possible," Agarwal said. "We do not see a risk of imports being lower than that."

Some market participants have said that Philippine imports could rise to 5.5 million-6 million mt if El Niño significantly disrupts domestic production, although Agarwal said those estimates remain unconfirmed.

Indian competition pressures Thailand

Agarwal said India's aggressive pricing continues to pressure Thailand, particularly in white and parboiled rice markets, but Thailand retains a loyal customer base due to its distinct quality profile.

When the premium for Thai rice widens to around $50/mt or more, some buyers may switch to Indian supplies, especially in price-sensitive African markets. However, Thailand remains competitive in markets where consumers value its grain characteristics and quality.

Platts assessed Thai parboiled 100% STX at $419/mt FOB on May 14, while India parboiled 5% STX was assessed at $317/mt FOB the same day.

"India and Thailand have been coexisting for years," Agarwal said. "There is something unique and distinct about what Thailand is offering."

Africa Olam Agri's core market

Africa remains Olam Agri's largest rice market, where Olam runs one of the largest branded rice distribution businesses and serves multiple other countries through partners. Agarwal said import growth into the continent may be moderate in 2026 after a sharp increase in purchases last year left several markets carrying comfortable inventories.

"We used to have a very large concentration of our business in Africa," Agarwal said. "Today, we have a fairly diversified presence across Asia, the Middle East, Africa, Europe and Oceania."

He said Olam Agri plans to continue expanding into new markets while focusing on supply reliability, quality assurance, and long-term customer partnerships.

"We have moved away from only being a trader to becoming a long-term partner and supplier to specialty buyers who are looking for supply security and quality assurance," he said.

Thailand is Olam Agri's second-largest rice export origin after India, and Agarwal said the company sees further growth opportunities from the country over the coming years.