The rice market is experiencing one of its most challenging periods in recent years. After the record 2024/25 harvest, prices have fallen 35% since March, reaching their lowest levels in five years. According to an analysis by Itaú BBA's Agro Consulting, strong supply, combined with low international competitiveness, is sustaining the downward trend and is expected to lead to a reduction in area and investment in the next season.
According to Conab, national production reached 12,7 million tons in 2024/25, 21% above the previous cycle. This growth was driven by a nearly 10% increase in cultivated area and favorable weather conditions, which ensured excellent productivity. However, domestic consumption—estimated at 11 million tons—grew only 5%, highlighting the inelasticity of demand for the grain.
With supply far exceeding consumption, final stocks have surged to over 2 million tons, nearly four times the volume of the previous cycle. This surplus explains much of the pressure on prices, which are below the minimum price of R$63,64 per bag set for the season.
Faced with the profitability crisis, the federal government announced on October 22nd a R$300 million emergency package to support the rice sector. The funds will be allocated through the PEP, Pepro, and AGF programs, aiming to transport up to 630 tons of rice and alleviate the domestic market. Operations are expected to begin in the coming weeks, providing some liquidity to producers.
Between January and September, Brazil exported 856 tons of rice, a 9,6% increase compared to the same period in 2024. Despite the increase, shipments remain below the volumes recorded in 2022 and 2023. The appreciation of the real against the dollar and competition with North American rice have reduced the competitiveness of Brazilian rice abroad.
With the recent rise in the dollar, there has been a slight improvement in export parity, but the international environment remains challenging. Record production in the United States and the resumption of exports by India—the world's largest exporter—are intensifying pressure on international prices.
Despite ample domestic supply, Brazil maintained a steady pace of imports, benefiting from the strong competitiveness of rice from Mercosur. Paraguay accounted for 72% of the imported volume, and Uruguay for 20%, according to Secex data. Volumes remained close to those of 2023 and higher than those observed in 2021 and 2022.
Expectations for the next harvest are a decline. Conab projects a 5,7% drop in planted area, which should fall from 1,76 million to 1,66 million hectares. Estimated production is 11,5 million tons—10% lower than last year's harvest. The decline reflects producers' discouragement over low profitability and the trend toward reduced use of technology as a way to contain costs.
In Rio Grande do Sul, the main producing state, planting began unevenly, with excessive rainfall in the Western Frontier and Campanha regions. Even so, irrigated crops are unlikely to be severely affected by the La Niña phenomenon, as cultivation occurs in areas with controlled flooding.
Despite the prospect of lower production, Itaú BBA and Conab indicate that the market will continue to have supply exceeding demand. Final stocks are expected to be close to 1,8 million tons at the end of the 2025/26 season—a volume still considered high. Exports, estimated at 2,1 million tons, will be crucial to alleviate stock levels and restore balance in the sector.
Meanwhile, Brazilian rice faces a scenario of low liquidity and reduced profitability, which challenges the sustainability of the crop and requires strategic adjustments from producers for the next cycle.
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