The increase in the price of rice is the result of the overheating of global demand caused by the COVID-19 pandemic, combined with the strong appreciation of the dollar against the real and the lack of incentive for rice farming activity in Brazil in the last 10 years, which has led many producers to abandon the sector, with the consequent reduction of the planted area, although there was an increase in productivity (production yield per hectare).
This was the scenario presented by the president of Abiarroz, Elton Doeler, when participating in a public hearing of the Consumer and Taxpayer Protection Commission of the Legislative Assembly of Minas Gerais this Wednesday (30). The virtual meeting was proposed by state deputy Bartô and also included the participation of Sindarroz-MG, the supermarket sector, Cepea/Esalq/USP, the Public Ministry of the State of MG and the Forum of Procons Mineiros.
According to the president of the Brazilian Rice Industry Association, the sector has experienced a scenario of discouragement in recent years, which has caused a strong depreciation in the price of the product. “The price of a kilo of rice has hovered around R$ 2 over the last eight years. This has led many producers to opt for other productive activities, such as soybeans and cattle farming”, recalled Doeler.
In Rio Grande do Sul, the largest national producer of the cereal, in addition to the abandonment of the sector by farmers, there was a reduction of 30% in the number of processing industries, added the president of Abiarroz. This scenario, he pointed out, also led to disinvestment in the agroindustry, as the chain began to have insufficient profitability. “In the last seven, eight years, the activity has not been remunerative”, reinforced Doeler.
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With the pandemic, some of the main global rice suppliers, such as India and Thailand, withdrew from the market, resulting in greater demand for the Brazilian cereal. From March to August this year, international demand for Brazilian rice jumped, compared to the same period in 2019, said the president of Abiarroz.
“This made Brazil an important player in the world rice market, creating an interesting opportunity for producers and processing industries, due to exchange rate appreciation” observed Doeler. At the same time, the pandemic caused a greater number of Brazilians to change their eating habits and start eating more meals at home, which also increased domestic demand.
As a result of this context, there was an appreciation of the cereal, whose 50-kilo bag went from R$ 45 in March to R$ 106 in August, according to data from Cepea, said Doeler. In the domestic market, the price of the product also recovered, with a kilo between R$ 5 and R$ 7 at retail. For him, this price level must remain, which will give sustainability to the chain and must guarantee supply in the coming years, without surprises like what happened this year due to Covid-19.
During the hearing, the president of Abiarroz also highlighted that the industry does not set prices, being just one of the links in the chain. “The industry is simply the intermediate link in the chain. It buys from producers, processes it and resells it to supermarkets, which have rice as one of their consumer-attracting products. There is no one to blame for the increase in rice prices.”
Doeler also spoke, in the online meeting, about the request made by Abiarroz to the federal government to remove the TEC (Common External Tax) on the import of rice from third countries, in addition to Mercosur, where the tariff is no longer applied due to the trade agreement between Brazil, Argentina, Uruguay and Paraguay.
“We asked for the withdrawal of the TEC, concerned not only with the price of rice to consumers, but also with internal supply”, highlighted the president of Abiarroz. The federal government authorized the import of up to 400 thousand tons of the product without charging TEC from third countries. For him, opening up the market is important to encourage domestic supply.
Source: DATA
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