The Federation of Rice Associations of Rio Grande do Sul (Federarroz), issued a joint note with the Federation of Agriculture of the State of Rio Grande do Sul (Farsul) and Federation of Agricultural Workers of Rio Grande do Sul (Fetag / RS), reinforcing the guarantee to the consumer about the grain supply and food security in this moment of social isolation due to the Coronavirus pandemic (COVID-19). 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 basket. The entities signal that there is several evidences to prove that the upward movement of prices paid to producers and, therefore, by consumers, are linked merely to the market situation and without excesses linked to speculation or export of the grain. According to the note, the strengthened price behavior will be present throughout the commercial year 2020/21 due to the reduction in Brazilian production and higher international prices. In November 2019, sector entities had already foreseen and disclosed this market movement, aggravated in March by the Coronavirus. In the note, items such as the historic price behavior of paddy rice at the time of harvest and strengthened prices in January and February 2020 were considered, with wholesale and retail closing the second month of the year with adjusted stocks. In addition, they point out that the industrial sector in Rio Grande do Sul is in the final stage of receiving raw material from Rural Product Certificate (CPR) operations. Federarroz, Farsul and Fetag also reinforce the strong decapitalization of the productive sector with the need for realization of immediate cash, in addition to the strong change in the commercial balance of rice, indicating a fall in exports and an increase in imports. The entities also remember that an important portion of the export comes from a by-product of rice, broken grain, and that it is not consumed by the Brazilian population. Finally, the federations continue to recommend staggered billing to producers, in order to keep the market supplied.
Source: Universo Agro / DATAGRO