CNA debates rice market and prospects for the next harvest

The Brazilian Agriculture and Livestock Confederation (CNA) debated, on Wednesday, December 2, the situation in the rice market and the exemption from the Common External Tariff (TEC) for importing the product outside Mercosur, which ends in December 31st.

The matter was discussed during the meeting of the Rice Sector Chamber of the Ministry of Agriculture with the presence of entities representing the production chain. The TEC was removed by the government amid the rise in cereal prices this year. On rice purchased outside Mercosur, there was an 8% tax that was zeroed.

“The CNA’s position is against the continuation of the tariff exemption, because the rice harvest begins to enter the market at the beginning of January and intensifies in March, so it is not necessary to continue the tariff exemption”, assessed Francisco Schardong , representative of the CNA in the Sector Chamber and coordinator of the Rice Commission of the Agriculture Federation of the State of Rio Grande do Sul (Farsul).

During the meeting, a proposal was presented to extend the exemption until the end of February 2021. But in a vote, the Sector Chamber was against the exemption from the extension and will send a letter to Minister Tereza Cristina informing the decision.

Sérgio Roberto Gomes, analyst at Companhia Nacional de Abastecimento (Conab), analyzed the rice market and spoke about trends for the 2020/2021 harvest.

According to him, in the projection of cereal prices, the factors for the increase are: lower transit and supply stocks, expansion of domestic and foreign consumption, rise in the dollar and prices on the international market.

In relation to the downside factors, there is competition from Mercosur, the largest North American harvest, and the projection of a slight expansion of area in the next harvest.

Gomes also presented a proposal for a new Conab instrument, the Private Storage Award (PAP). It is a minimum price guarantee policy instrument, with the objective of paying a premium to the producer/cerealist and keeping the product in private stock, not Conab's, for a specified period of time. The prize will help pay for storage and shipping costs.

“It is another tool to complement the performance of the Minimum Price Guarantee Policy, but it needs to be better discussed to adapt to the needs of rural producers,” said Fábio Carneiro, technical advisor to the National Commission for Cereals, Fibers and Oilseeds of the CNA.