The Federation of Rice Growers Associations of Rio Grande do Sul (Federarroz), issued a joint note with the Agriculture Federation of the State of Rio Grande do Sul (Farsul) and the Federation of Agricultural Workers of Rio Grande do Sul (Fetag/RS), reinforcing consumer guarantees regarding grain supply and food security at this time of social isolation due to the Coronavirus (Covid-19) pandemic. However, they warn that the possibility of a change in consumer price levels will in no way weigh on the family budget due to the low percentage of rice in the basic food basket.
The entities point out that there is several evidence to prove that the upward movement in prices paid to producers and, therefore, by consumers, are linked merely to the market situation and without excesses linked to speculation or grain export. According to the note, the strengthened price behavior will be present throughout the 2020/2021 commercial year due to the reduction in Brazilian production and higher international prices.
In November 2019, sectoral entities had already predicted and announced this market movement, worsened in March by the Coronavirus. The note considered, for example, items such as the historical price behavior of paddy rice at the time of harvest and strengthened prices in January and February 2020, with wholesale and retail ending the second month of the year with adjusted stocks. Furthermore, they remember that the industrial sector in Rio Grande do Sul is in the final stage of receiving raw materials from Rural Product Certificate (CPR) operations.
Federarroz, Farsul and Fetag also reinforce the strong decapitalization of the productive sector with the need to raise immediate cash, in addition to the strong change in the rice trade balance, indicating a drop in exports and an increase in imports. The entities also remember that an important portion of exports comes from rice by-products, broken grains, which are not consumed by the Brazilian population. Finally, the federations continue to recommend staggered billing to producers, with the aim of keeping the market supplied.
Source: Notícias Agrícolas
