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Conjuncture of factors caused high rice price, says president of Abiarroz

Posted by Marina

The increase in the price of rice is a result of the overheating of world demand caused by the pandemic of COVID-19, coupled with the strong appreciation of the dollar against the real and the lack of incentive to rice activities in Brazil in the last 10 years, which has led many producers to leave the sector, with the consequent reduction of the planted area, although there has been 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 Protection and Taxpayer Committee 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 Association of the Rice Industry, the sector has experienced a scenario of discouragement in recent years, which caused a sharp depreciation in the price of the product. "The price of a kilo of rice has been around R $ 2 in the last eight years. This has led many producers to opt for other productive activities, such as soybeans and beef," recalled Doeler.

In Rio Grande do Sul, the largest national cereal producer, in addition to the abandonment of the sector by farmers, there was a 30% reduction in the number of processing industries, added the president of Abiarroz. This scenario, he pointed out, also led to disinvestment in the agribusiness, since the chain started to have insufficient profitability. "In the last seven, eight years, the activity has not been remunerative", reinforced Doeler.

Continues after the form

With the pandemic, some of the main global rice suppliers, such as India and Thailand, withdrew from the market, causing a greater demand for Brazilian cereal. From March to August this year, the international demand for rice in Brazil took a leap, compared to the same period in 2019, pointed out the president of Abiarroz.

"This has made Brazil an important player in the world rice market, creating an interesting opportunity for producers and processing industries, due to the 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 at home, which also increased domestic demand.

As a result of this context, there was an appreciation of the cereal, whose 50 kg 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 in retail. For him, this price level should remain, which will give sustainability to the chain and should guarantee the supply in the coming years, without any problems like what happened this year due to the covid-19.

During the hearing, the president of Abiarroz also pointed out that the industry is not a price maker, being only one of the links in the chain. "The industry is simply the intermediate link in the chain. It buys from producers, processes and resells it to supermarkets, which have rice as one of their products to attract consumers. There are no culprits for the increase in the price of rice."

Doeler also spoke, at the online meeting, about the request made by Abiarroz to the federal government for the withdrawal of the TEC (Common Foreign Tax) on the import of rice from third countries, in addition to Mercosur, where the tariff is no longer applied because of the trade agreement between Brazil, Argentina, Uruguay and Paraguay.

"We ask for the withdrawal of TEC concerned not only with the price of rice to the consumer, but also with the internal supply", stressed the president of Abiarroz. The federal government authorized the importation of up to 400 thousand tons of the product without the collection of TEC from third countries. For him, the opening of the market is important to encourage domestic supply.