With flooded plantations, Brazil will import rice to avoid high

The National Supply Company (Conab) will import one million tons of rice to avoid an increase in the price of the grain. The announcement was made this Tuesday (07) by the Minister of Agriculture and Livestock, Carlos Fávaro, at Palácio do Planalto.

The measure is necessary in light of the calamity in Rio Grande do Sul, which produces 70% of the rice consumed by Brazil. According to Fávaro, Brazilian stocks are sufficient to meet demand, but the government is concerned about the possibility of speculation. “An MP (provisional measure) is already being prepared authorizing Conab to make a purchase in the order of one million tons,” declared Fávaro. “I want to make this very clear: the government does not, under any circumstances, think about competing with rice producers. Conab will not sell to wholesalers, who are buyers from producers,” he added.

The minister also stated that the first batch will be 200 thousand tons of husked and bagged rice, to speed up its distribution. The government will sell the food on the outskirts and only to small buyers, to avoid harm to producers in Rio Grande do Sul already affected by the rain. The purchase depends on the approval of the Legislative Decree Project (PDL) that declares a state of calamity in the state of Rio Grande do Sul. As soon as possible, the country will open an auction to purchase the rice. Fávaro assesses that Mercosur nations will have an advantage in the competition, such as Argentina, Uruguay, Paraguay and Bolivia.

In the minister’s assessment, if the purchase occurs quickly, there will be no increase in the price of grain. He also highlighted that, despite the increase that occurred at the beginning of the year, during the off-season, the price of a bag of rice had already dropped, and the expectation is that it will maintain its current level. The ministry estimates that 1.6 million tons of rice are still in the fields, that is, flooded.

However, part of the harvest that has already been harvested has also been flooded in warehouses, although it is not possible to estimate the loss. The biggest problem, for Fávaro, is the condition of the roads, which makes it impossible to send a large part of the rice to other Brazilian states. “We have to avoid speculation, avoid shortages. Pardon the word, but hell is getting small. People making fake news at a time like this, financial speculation at a time like this”, added the minister.

The possibility of importing rice had already been mentioned earlier by President Luiz Inácio Lula da Silva, during the program Bom dia, Presidente, on the state-owned EBC. Although Lula spoke about importing “rice and beans”, bean production is not concentrated on Rio Grande do Sul soil, so it was not affected.

In addition to keeping the price of rice stable, the minister announced that the National Monetary Council (CMN) will suspend the payment of debts of rural producers in Rio Grande do Sul for a period of 90 days, which may be extended in the future.

Losses

According to a report produced by Cogo Consultoria, rains could cause the loss of up to 1.6 million tons of rice in an area of 200 thousand hectares. The number indicates the amount of rice not yet harvested in the state, which represents 22% of the total expected for this harvest.

In a situation of total loss of this amount, this could represent the loss of an impressive 16% of all estimated production for the country, which is 10.5 million tons. “We only have an estimate based on the area that was been harvested until now, and we have not even managed to estimate yet what was lost, which had already been harvested, and was still stored in the state. So what is in the report is only what, in fact, will be lost at the field level. What will not be harvested or will be partially harvested and all of this still has no answer”, explains Carlos Cogo, an agribusiness consultant for over 30 years.

In relation to soybeans, the estimated losses could represent an impact of up to 5% on national production.