Rice: Extraction
From flooded paddy to polished white grain
What this tab covers How it is mined, drilled or grown, and processed into a tradeable form: the main methods compared, their unit economics, by-products, and the companies that do this work globally and in India.Most rice grows in flooded paddies across monsoon Asia, with irrigated crops in the US South, California and Egypt and rain-fed upland rice in Africa. Seedlings are transplanted or seeded directly, and the tropics allow two or three crops a year. Harvested paddy is dried, hulled to brown rice and polished to white. Grades are set by the share of broken grains, so 'Thai 5%' means 5% broken. Morgan counted more than eight thousand varieties, from sticky short-grain japonica to fragrant basmati (pdf p. 401). Flooded paddies emit methane, and the crop is thirsty for water.
Almost all rice is grown in Asia on small farms. The main division is water. Irrigated lowland paddies, flooded for most of the season, give the highest and steadiest yields and supply most of the world's rice. Rainfed lowland fields depend on the monsoon and give lower yields, as in north-east Thailand and eastern India. Upland and deepwater rice are small. Planting is shifting from hand transplanting to direct seeding as farm labour gets scarce. After harvest, paddy is milled to white rice or first parboiled, and the milling out-turn decides how much saleable rice each tonne of paddy gives.
Methods compared
| Method | Share of supply | Typical scale | Recovery / efficiency | By-products | Unit cost |
|---|---|---|---|---|---|
| Irrigated lowland, transplanted (puddled) rice | about three-quarters of world rice output (IRRI, indicative) | farms typically 0.5-3 ha in Asia; much larger in the US and Australia | paddy yields 2024: China 7.15 t/ha, Vietnam 6.15, Egypt 9.13, US 8.68, Australia 11.9 (FAOSTAT) | straw (often burned in north India), husk, bran | Indicative: common paddy MSP Rs 2,369/quintal for 2025-26 with a quoted 50% margin over A2+FL cost implies about Rs 1,580/quintal of paddy (CCEA, May 2025); the 2026-27 MSP of Rs 2,441 at the same 50% margin implies about Rs 1,630 (Cabinet, 13 May 2026) |
| Rainfed lowland rice | n/a | smallholdings in eastern India, Bangladesh, north-east Thailand, Myanmar, Cambodia | paddy yields 2024: Thailand 2.98 t/ha, India 4.31 (national average, mixed systems), Bangladesh 5.29 (FAOSTAT) | straw, husk, bran | n/a |
| Direct-seeded rice (DSR), mechanised | n/a | large mechanised farms in the US South, California, Australia; growing in north-west India | US paddy yield 8.68 t/ha in 2024 (FAOSTAT) | straw, husk, bran | n/a |
| Milling and parboiling | applies to almost all rice | modern mills 4-20 t paddy per hour; many small hullers in South Asia (indicative) | FCI out-turn ratio 67% for raw rice, 68% for parboiled | husk (fuel, about a fifth of paddy weight), bran (rice bran oil, feed), broken rice (ethanol, brewing, feed) | n/a |
How each method works
Irrigated lowland, transplanted (puddled) riceFields are levelled, flooded and puddled to seal the soil, then seedlings from a nursery are transplanted by hand or machine. Standing water suppresses weeds. Canal or tubewell irrigation allows two or three crops a year in China, Vietnam, Punjab and Egypt.
High, stable yields; heavy water use (falling water tables in Punjab) and methane emissions.
IRRI Rice Knowledge Bank (indicative); FAOSTAT 2024; CCEA kharif MSP decisions (May 2025, May 2026) Rainfed lowland riceBunded fields fill with monsoon rain rather than irrigation. Farmers often grow traditional or fragrant varieties such as Thai Hom Mali. Floods and dry spells can both cut yields.
Low cash cost and premium fragrant grain; weather-exposed and low-yielding.
FAOSTAT 2024 Direct-seeded rice (DSR), mechanisedSeed is drilled into dry or wet soil, skipping the nursery and puddling. It saves labour and water but needs good weed control. It is standard in the US, Australia and much of Brazil, and is being promoted in Punjab and Haryana.
Cuts labour and water use; weeds and uneven stands can lower yields.
FAOSTAT 2024 Milling and parboilingPaddy is cleaned, dehusked to brown rice and polished to white. Parboiling soaks and steams paddy before milling, which hardens the grain, cuts breakage and keeps nutrients. Colour sorters grade by broken share. India's FCI pays millers to deliver custom-milled rice at fixed out-turn ratios.
Out-turn and broken share decide profit; bran oil and husk power add value.
FCI custom milling norms; industry practice (indicative) Unit economics are indicative ranges from the sources named; costs vary widely by deposit, region and year.Who does it: global
| Company | Country | Activity | Volume | Year | Source |
|---|---|---|---|---|---|
| Olam Agri | Singapore | rice origination, milling and distribution in Asia and Africa | not published | 2025 | Rice volumes not found in public sources checked |
| Louis Dreyfus Company | Netherlands/France | rice merchandising | not published | 2025 | Rice volumes not published separately |
| Vinafood 2 (Southern Food Corporation) | Vietnam | state-owned rice exporter | not published | 2025 | Volume not found in public sources checked |
| Loc Troi Group | Vietnam | seed, farming contracts, milling and export | not published | 2025 | Volume not found in public sources checked |
| Asia Golden Rice and CP Intertrade | Thailand | leading Thai exporters (white, parboiled, Hom Mali) | not published | 2025 | Volumes not found in public sources checked |
| Sinograin (China Grain Reserves Group) | China | state reserve stockholder | not published | 2025 | Reserve volumes not published; USDA puts all China rice stocks at 105.5 Mt (end 2025/26) |
Who does it: India
| Company | Country | Activity | Volume | Year | Source |
|---|---|---|---|---|---|
| Food Corporation of India (FCI) with state agencies | India | paddy procurement at MSP, custom milling, PDS, open-market and ethanol sales | 72.07 Mt paddy procured in kharif KMS 2025-26 (about 48 Mt rice at the 67% out-turn); KMS 2026-27 target 70.86 Mt paddy | KMS 2025-26 | GKToday summary of Food Ministry figures (Mar 2026) |
| KRBL (India Gate) | India | largest basmati miller and exporter | not published | FY2026 | Volume not found in public sources checked |
| LT Foods (Daawat) | India | basmati and specialty rice, India, US and Europe | not published | FY2026 | Volume not found in public sources checked |
| Ethanol distilleries buying FCI rice | India | grain ethanol for E20 blending | 6.35 Mt FCI rice sold to distilleries, June 2025-June 2026 (Rs 14,597 crore, about 40% below acquisition cost) | 2025-26 | Moneylife citing Government reply, 2026 (source page could not be re-checked in Oct 2026) |
India is the largest grower (26.6% of world paddy in 2024, FAOSTAT) and the largest exporter (33.6% of 2024 export value; 22.0 Mt in 2025/26, USDA). It curbed exports from September 2022 to October 2024, which lifted Thai 5% prices to $660/t in January 2024 (World Bank).