Rice production cost could exceed R$90,00 in the 2021/2022 harvest

The meeting of the National Rice Sector Chamber was once again held at the Official Opening of the Rice and Grains Harvest in lowlands that began this Wednesday, February 16, at the Terras Baixas Station, of Embrapa Clima Temperado, in Capão do Leão (LOL). The president of Federarroz, Alexandre Velho, welcomed everyone, highlighting that the Harvest Opening is a consolidated event in the Rio Grande do Sul and Brazilian calendar, and that information is a fundamental input for conducting business.

Afterwards, Sérgio Santos, from the National Supply Company (Conab), presented data relating to the rice market, such as prices, costs, productivity and exports. In relation to cereal productivity in the State, he highlighted that due to water reduction the impact should be a reduction of 11,4%, according to the 5th Survey of the 2021/2022 Grain Harvest, released last week. Regarding exports, he stated that at the beginning of January a very strong demand for Brazilian rice was noticed.

In terms of prices, when carrying out a qualitative analysis of the market, Santos said that there is an upward trend throughout 2022. “Producers are more capitalized, with the capacity to scale sales further, if there is a smaller 2021/2022 harvest, good external demand and the projection of a surplus situation. The Asian market is very hot”, he noted.

Santos also stated that even in an optimistic scenario, with an expectation of price recovery this year, the rise in production costs should slow down profitability. “We identified a significant increase in both variable and operational costs, and this increase is taking us back to a scenario of not very attractive profitability for the 2021/2022 harvest,” he concluded.

The commercial director of the Rio Grandense do Arroz Institute (Irga), João Batista Gomes, also addressed the issue of rising production costs. He said that the Institute calculated a production cost of R$2021 per 2022-kilo bag for the 90,74/50 rice harvest, considering an average of 166,13 bags per hectare and within an already established criteria and methodology of using the average of the last three harvests. “Part of this cost is a projection, that is, it is those items that are not yet consolidated”, he explained, highlighting that it is a guide, an alert for this year.

The president of the Rice Sector Chamber, Daire Coutinho, stated that among the topics discussed at this meeting, the self-regulation protocol that has been drawn up by a working group is a challenge for the sector. “We have the expiration of the old classification law and a new project that is already going to the Senate, and brings a new reality, also focusing on traceability. As the rice sector involves a lot of dispersed production, we have difficulties with this, but the chain made a commitment to the Ministry of Agriculture to present a self-regulation project”, he informed.

Coutinho also emphasized the debate on production costs, highlighting that the numbers presented by Irga are frightening and worrying. “The first concern is with the commercialization of the harvest and the second in relation to producers who had problems with high costs and losses due to the lack of rain. They will be on the sidelines of the commercialization that is accelerating and improving, as Conab itself has shown within an environment of better prices”, he warned, saying that a solution will need to be found. The next meeting of the Rice Sector Chamber will be on May 25th.

The Official Opening of the Rice and Grains Harvest in Terras Baixas takes place from February 16th to 18th at the Terras Baixas Station, of Embrapa Clima Temperado, in Capão do Leão (RS), with in-person and online activities. The event has a Health Protocol aimed at preventing and combating the epidemic and will be held in a completely open environment. Among the measures are the mandatory use of a mask, hand hygiene, registration preferably in digital or electronic mode, signage materials and guidance staff for visitors. According to State Government regulations, there will be a requirement for a vaccination passport or, as an alternative, the presentation of a negative PCR test.

The program includes technological showcases, a fair, lectures and debates, tributes and the Official Opening ceremony. It is organized by Federarroz, co-organised by Embrapa and Premium sponsored by Irga and the Ministry of Agriculture, Livestock and Supply. Information and registration can be obtained via the Colheita do Arroz app or on the website www.colhetadoarroz.com.br.