Rice prices climb amid Iran war supply chain disruptions

Six months into the conflict between the United States and Israel on one side and Iran on the other, the war's toll on global food markets is becoming increasingly visible. US rice prices have risen sharply since hostilities began on February 28, 2026, with research firm Hedgeye reporting a surge of more than 47%, according to an analysis published by CryptoBriefing. Rice futures on major exchanges have climbed more than 22% over the past year, though the extent of the increase depends on the measure used — Bureau of Labor Statistics data through July shows a more modest rise in retail prices.cryptobriefing+2

What is not in dispute is the mechanism driving costs higher. The closure and disruption of the Strait of Hormuz, one of the world's most critical maritime chokepoints, has sent shipping costs, insurance premiums, and fertilizer prices surging since February.cnbc+1

Fertilizer and Shipping Costs Cascade Through Food Markets

The United Nations warned in April that the "clock is ticking" for global food systems as disruptions in the Strait of Hormuz choked off fuel and fertilizer flows needed for the spring planting season. The World Economic Forum reported in May that farmers faced urea fertilizer price increases of 20% to 60%, while CNBC reported that over one-third of global fertilizer trade passes through the affected waterway.weforum+2

These input cost increases have rippled through agricultural supply chains worldwide. Reuters reported in March that disrupted fertilizer shipments and soaring energy prices threatened a "fresh food-price surge across vulnerable nations". The FAO noted that between 20% and 45% of essential agrifood inputs depend on maritime routes through the Strait of Hormuz.reuters+1

India's Rice Exports Feel the Squeeze

India, the world's largest rice exporter supplying over 40% of global trade, saw its exports fall 1.3% year-on-year in the first four months of 2026 to 8.39 million metric tons, according to Reuters. Basmati rice shipments dropped 7% as exports to Gulf markets — including Iran, Iraq, and Saudi Arabia — faced delays and cancellations. Shipping insurance and freight expenses surged after the conflict began, disrupting maritime traffic through the Strait of Hormuz.reuters

Indian exporters anticipated shipments would "remain below normal levels until the conflict in Iran is resolved," Reuters reported. Meanwhile, US rice acreage fell 34.1% year-on-year to the lowest level since 1974, further tightening supplies.cobank+1

No Relief in Sight

With multiple ceasefire attempts having failed as of late August 2026, the supply chain disruptions show no signs of abating. TD Economics warned in May that fertilizer shortages during the spring planting season would impact crop yields "well into" 2027. Oxford Economics estimated that continuing geopolitical disruptions could affect approximately 86 million tons of grain exports this year — about 17% of the global total.tovima+2

Rice feeds roughly half the world's population. Whether the price increase is closer to the BLS retail figure or the Hedgeye estimate, the direction is clear — and for import-dependent nations across South and Southeast Asia, the consequences are already being felt.