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According to a study released monthly by the National Supply Company (Conab), rice prices fell significantly in the semester. AgroConab points out that the June average closed at around 11% below the May average. The scenario was caused by lower consumption expectations, added to the deficit in the trade balance in 2021.
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According to the bulletin, rice prices fell in an attempt to align with export parity. Despite the decline in prices in June and the increase in production costs, the scenario is one of remunerative prices for producers. With the prospect of strengthening the national currency, a reduction in the pace of exports identified in the 2019/2020 harvest is expected. The projection is that Brazil will sell 1.3 million tons of grain in the 2020/2021 harvest. As a result, the period should end with a surplus of 200 thousand tons, with imports of 1.1 million tons for the same period.
In relation to supply and demand, the outlook, throughout 2021, is for the replenishment of transit stocks. In addition to the expectation of lower consumption, the prospects for an increase in production and a drop in exports will contribute to the increase in stocks.
With an expanded national supply due to the excellent productivity of the 2020/2021 harvest and the cooling in demand, domestic prices are on par with import and export parities. As a result, the expectation is for less volatility in market prices, if there are no significant fluctuations in the exchange rate until the start of the next 2021/2022 harvest.
By: Eliza Maliszewski | agrolink
