US Rice Exports Hit by Middle East Conflict as Global Prices Soften Amid Supply Glut

Global rice prices have softened in recent weeks as ample supplies collide with weak demand across key markets, even as geopolitical tensions in the Middle East inject fresh uncertainty into the trade.

The ongoing Iran conflict has begun to significantly disrupt the U.S. rice industry, particularly exports to the Middle East. According to the Rice Advocate report by the US Rice Producers Association released on 20th March 2026, while the Western Hemisphere remains the largest destination for U.S. rice, shipments to countries such as Iraq, Saudi Arabia, Qatar and the UAE have become increasingly vital in recent years. However, the closure of the Strait of Hormuz has effectively halted this trade, leaving shipments stranded and contracts, including a recent tender to Iraq, on hold.

The disruption has triggered ripple effects across the U.S. supply chain, with barges unable to load due to blocked export routes. Industry experts warn that even if trade resumes, the current losses may not be fully recovered.

A similar situation was witnessed in 2023 when conflict-related port closures in Yemen disrupted Calrose rice exports to the MENA region. That episode led to stockpiling and nearly a 20% drop in farm-level prices in California. Analysts now expect a repeat scenario, this time impacting long-grain rice farmers in the southern United States.

Rising crude oil prices are further compounding the situation by increasing input costs such as fertilizers, agrochemicals and fuel, prompting farmers to reduce acreage. The upcoming USDA planting reports are expected to reflect a decline in long-grain rice cultivation.

Meanwhile, South American countries have started supplying new crop rice to global markets, keeping prices stable but intensifying competition for U.S. exporters. Countries like Uruguay and Brazil are expected to remain strong competitors, particularly in the paddy segment, where demand is shifting away from U.S. origins.

In Asia, fresh supplies from Thailand and steady output from India and Vietnam are adding to downward pressure on prices. According to the U.S. Department of Agriculture, export prices have declined for most major suppliers due to subdued demand.

Data from the Food and Agriculture Organization indicates that while global rice prices saw a marginal monthly rise in February, they remain below last year’s levels, reflecting mixed trends across different rice categories.

Adding to global concerns, European rice producers have warned of a deepening crisis due to rising imports, higher production costs and stricter regulations, signaling continued stress across the global rice sector.