What are Rough Rice Futures?

Rice is the world’s most produced grain, after wheat and corn, and is a staple food for around 2 billion people, in much of Asia. It enjoys vast global demand, but its global trade is controlled by a few nations. Given the geo-political and climate-related changes in the world, rough rice is increasingly becoming popular in the futures market.

Rough rice futures help producers and marketers to manage the risk of price fluctuations in the rough rice market. A rough rice future is a standardized contract that is traded on an exchange between two parties. The buyer of the contract agrees to accept delivery of a specified quantity of rough rice at a predetermined price at a future specified date. The seller agrees to supply such a quantity as per the contract.

Despite the global popularity of rough rice, rough rice futures are not widely available and very few commodity exchanges in the world sell these futures. In the U.S., rice futures are sold on the Chicago Mercantile Exchange. 

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