In short
Irga projects 861,800 hectares of rice in Rio Grande do Sul for the 2026/27 crop, 3.4% less than last season. Conab puts Brazil's production at 10.8 million tonnes, down 2.9%.
In Paraguay, Brazil's main foreign rice supplier, planting was also delayed by rain, costs rose 15% to 20% and the sector is discussing planting less.
The price of a sack of paddy rice is back above R$ 80 in Rio Grande do Sul, and El Niño may reach very strong intensity from November, bringing more rain to the south.
After two years of thin margins, Mercosur rice farmers are entering the 2026/27 crop with caution. Smaller planted area, uneven planting and a strong El Niño point to tighter supply in 2027, on both sides of the border. Here are the numbers and what to watch until harvest.
Rio Grande do Sul: a crop that starts with the handbrake on
At Expointer, Irga announced planting intentions of 861,800 hectares, 3.4% below the 891,900 hectares of last season, which had already fallen 8%. Federarroz, the state growers' federation, believes the actual area may be even smaller. The reasons given are tight credit, debts under renegotiation and the climate risk of El Niño. Part of the lowlands is also being rotated with soybeans.
The move makes sense. In 2025, the sack price stayed below total cost for much of the year, and planting less is the most direct way for the market to correct oversupply. It is the cycle we explain in how the price of a sack of rice is set.
Planting: a fast start, then waterlogged fields
Planting started at a strong pace. By the end of September, the Western Frontier had already sown 52.6% of its area, compared with 26.7% in 2024 and almost zero in 2025 at the same point. Statewide, 18% of the intended area was planted.
In October, things changed. Three weeks of heavy rain, low temperatures and little sunlight delayed planting and crop emergence, according to Emater/RS. Pelotas reached 54% of its projected area, while Santa Maria stood at just over 15% and Soledade at 12%, with lowlands flooded along the rivers. In São Gabriel, Rosário do Sul and Santa Margarida do Sul, areas hit by floods are being assessed for replanting and repairs to irrigation and drainage.
For irrigated rice, planting outside the ideal window usually costs yield. Emater's initial estimate is 8,741 kg/ha, but that number depends on how planting ends.
Paraguay: the same rain, the area under debate
Paraguay has a direct weight in the Brazilian market. In the first half of 2026, the country exported about 660,000 tonnes of rice, and more than 83% went to Brazil, according to Caparroz, the Paraguayan rice industry chamber. Revenue, however, fell to US$ 137.5 million, from US$ 221.8 million in the same period of 2025, reflecting lower international prices.
With thin margins, the Paraguayan sector began discussing planting less. In July, projections by Caparroz and Feparroz, the growers' federation, pointed to an area of 150,000 to 160,000 hectares, about 30% below previous seasons. In September, Feparroz spoke of about 210,000 hectares, depending on the weather. The 2025/26 crop had yielded close to 1.25 million tonnes of paddy rice.
Weather also got in the way. In the first week of September, Paraguayan planting was at 10% to 15% of the projected area, below the usual pace of 20% to 30% in the second half of August. Production costs rose 15% to 20%, driven by fertilisers and crop protection, and now range from US$ 1,300 to US$ 1,600 per hectare. With El Niño ahead, the Ministry of Agriculture and Feparroz are discussing refinancing and working-capital measures for the sector.
For rice buyers, this matters: a smaller or later Paraguayan crop reduces supply that usually reaches the Brazilian market early in the year.
El Niño: the factor that could change the math
The October bulletin of Brazil's El Niño Panel, coordinated by Inmet, points to a high probability that the phenomenon will reach very strong intensity from November. For November to January, the outlook for southern Brazil is above-normal rainfall and, in Rio Grande do Sul, below-average temperatures.
For Mercosur rice, this means two risks: further delays to the remaining planting and damage to crops already sown in poorly drained lowlands. In the international market, the same El Niño tends to pressure production in Asia, as we showed in our article on El Niño and the global rice map.
Price: tight supply supports the sack
Prices reacted well before planting. In August, the Cepea/Irga-RS indicator reached R$ 70 per 50 kg sack, the highest level in 14 months, with farmers holding back, mills needing to restock and buyers from other states competing for grain. By the end of September, the sack was back above R$ 80 in the main markets. At the end of October, the state average was R$ 80.37, according to Emater/RS.
Even so, the recovery still does not cover costs for many farmers, whose total cost exceeded R$ 88 per sack in 2025. The question for the coming months is whether smaller area in Rio Grande do Sul and Paraguay, plus weather losses, will tighten 2027 supply enough to keep prices firm.
What to watch until harvest
End of planting in Rio Grande do Sul: if the area falls below 861,800 hectares, 2027 supply shrinks.
Final area in Paraguay: the gap between 150,000 and 210,000 hectares makes a big difference to the volume available to Brazil.
Rain in November and December: more excess water means more risk of replanting and yield losses.
Exports through the port of Rio Grande: firm foreign demand helps support the domestic price.
Public purchases and credit: these can change how fast farmers sell.
What this means for buyers and sellers
For farmers, tighter supply favours planning sales in lots instead of selling everything at harvest. For mills and buyers, it is worth bringing purchase planning forward, in Brazil and in Paraguay, before the weather confirms the losses. In a year like this, following the market closely makes a difference to the final price.
Planning to sell or buy from the next crop? Talk to Corretora Forgiarini: we have brokered the purchase and sale of paddy rice and type 1 milled rice in Brazil, Paraguay and Argentina since 1990.
Frequently asked questions about the 2026/27 rice crop
What is the projected rice area in Rio Grande do Sul for 2026/27?
Irga projects 861,800 hectares, 3.4% less than the 891,900 hectares of the 2025/26 crop.
How much rice will Brazil produce in 2026/27?
Conab's first estimate, from October 2026, is 10.8 million tonnes, down 2.9% from the previous crop.
How is the rice crop in Paraguay?
Planting was delayed by rain, costs rose 15% to 20% and the sector is discussing a smaller area. Projections ranged from 150,000 hectares in July to about 210,000 hectares in September, depending on the weather.
Will rice prices rise in 2027?
There is no guarantee. Smaller area in Rio Grande do Sul and Paraguay and the climate risk favour tighter supply, but prices also depend on final yields, exports and demand from mills.
References
Irga, via Brasilagro/Globo Rural. Área de arroz no Rio Grande do Sul deve diminuir 3,4% na safra 2026/27. 1 Sep. 2026 (in Portuguese). Available at: brasilagro.com.br
Agrolink. Semeadura acelera e muda debate sobre área de arroz. 30 Sep. 2026 (in Portuguese). Available at: agrolink.com.br
Agrolink (Irga and Emater/RS data). Safra de arroz 2026/27 tem previsão de 861 mil hectares no Rio Grande do Sul. 9 Oct. 2026 (in Portuguese). Available at: agrolink.com.br
Agrolink (Emater/RS data). Plantio de arroz enfrenta dificuldades após período chuvoso. 26 Oct. 2026 (in Portuguese). Available at: agrolink.com.br
Agrolink (Conab data). Safra de grãos projeta 367,1 milhões de toneladas. 15 Oct. 2026 (in Portuguese). Available at: agrolink.com.br
Inmet. Painel El Niño: boletim de outubro é divulgado. 29 Oct. 2026 (in Portuguese). Available at: portal.inmet.gov.br
Brasilagro (Cepea data). Preço do arroz no RS sobe para o maior patamar em 14 meses. 6 Aug. 2026 (in Portuguese). Available at: brasilagro.com.br
InfoNegocios Paraguay (Caparroz data). Productores arroceros pisan freno: evalúan reducir área de siembra. 22 Jul. 2026 (in Spanish). Available at: infonegocios.com.py
La Nación (Paraguay). Lluvias retrasan el avance de la siembra de arroz. 9 Sep. 2026 (in Spanish). Available at: lanacion.com.py
La Nación (Paraguay). Evalúan apoyo financiero al sector arrocero ante el fenómeno El Niño. 24 Aug. 2026 (in Spanish). Available at: lanacion.com.py