El Niño could keep Indonesia rice prices near record highs until spring 2027

Rice prices in Indonesia could remain near record levels until spring 2027 due to a delayed rainy season, distribution bottlenecks and the impact of El Niño. In September, the average retail rice price reached a record 15,769 rupiah ($0.88) per kg.

Rice production in January-November is expected to fall by 2.8% year-on-year, according to statistics agency BPS. At the same time, the National Food Agency expects output of around 34 mln tons in 2026, compared with consumption of more than 31 mln tons.

The main risks are already shifting to the 2027 crop. A shorter rainy season could delay planting and shorten the growing period, while El Niño-related dry weather is already limiting planting in some regions. Industry estimates suggest rice production could decline by as much as 10% next year.

Analysts expect prices to continue rising through March 2027, with meaningful relief unlikely before April, when supplies from the delayed main harvest begin to reach the market. Around 30% of Indonesia’s paddy fields lack irrigation and are particularly vulnerable to drought.

Additional pressure is coming from supply-chain problems, as retailers are being forced to buy rice at prices above the government’s retail price ceiling, discouraging them from securing supplies. Meanwhile, state agency Bulog held around 4.6 mln tons of rice stocks in mid-September, part of which is being kept as a strategic reserve against El Niño-related risks.

Tags: Indonesia, prices, rice