There are several common causes of small rice bumps on the outside of the arms: first, the most common cause is warts, which are caused by a viral infection that is contagious and can usually be transmitted while bathing. The second common cause is sebaceous cysts. The sebaceous glands normally secrete sweat, which is discharged outward through small tubules. If the tubules are blocked by sweat or surrounding tissues, causing the secretion of sweat can not be discharged normally, long-term secretion of sweat can cause the local enlargement of the cyst, it is easy to form sebaceous cysts.