US rice market worries over tariffs as prices hit more than 2-year lows

US rice market participants are concerned about the impact of the 25% import tariffs imposed by the US on Canadian and Mexican goods, effective March 4, as rice prices languish at their lowest level in over two years.

Platts, part of S&P Global Commodity Insights, assessed US Long Grain #2, 4% broken at $659/mt FOB NOLA on March 3, and US Long Grain #2 Paddy 55/70 at $344/mt FOB NOLA, both at the lowest level since July 2022.

"The paddy market has been extremely affected by the tariffs," a market source said. "With the tariffs imposed, I believe the market will become bearish very soon."

According to market participants, another contributing factor hurting prices has been the low milling yields of the current US Southern grain and Calrose crops due to unfavorable weather patterns.

Mexico and Canada are among the US's top trading partners. Mexico imported 681,467 mt of rice and Canada imported 205,533 mt of rice from the US in 2024, according to US government data.

Canada has imposed 25% retaliatory tariffs on about $20 billion of US imports including US brown and milled rice (HS 1006.20 and 1006.30). Though Mexico has not mentioned retaliatory tariffs, President Claudia Sheinbaum is anticipated to address them on March 9.

A farmer in the US raised concerns about possible retaliatory Mexican tariffs. "Mexico is one of the largest importers of US rice; therefore, if there are tariffs imposed on Mexico, I fear that they will hit back and target US agricultural commodities such as rice."

US rice market participants expect that Mexico might turn to South America to meet its rice needs, with Argentina, Brazil and Uruguay experiencing bumper harvests.

"South America is anticipated to have a larger harvest area compared with the previous year, and the crop is expected to be good," another market source said. "They are keeping their eyes on the Mexico market, which is not good for the US rice market."