Government and producers discuss solutions for rice prices

Representatives of the Rio Grande do Sul rice sector met with the National Supply Company (Conab) this Friday, June 6, to pressure the federal government for concrete measures to combat the price imbalance in the rice market. The presidents of the Federation of Rice Growers Associations of Rio Grande do Sul (Federarroz), Alexandre Velho, and of the Brazilian Rice Industry Association (Abiarroz), Renato Franzner, met with the president of the National Supply Company (Conab), Edegar Pretto, to examine the difficulties faced by the Rio Grande do Sul rice industry.

The meeting took place at the Conab headquarters in Porto Alegre (RS). The rice sector is experiencing a context of increased cultivated area, higher average crop productivity, weak domestic demand, exports below expectations and lower international prices. The president of Federarroz warned that the sale of the cereal is not covering the production costs of R$90,00, compared to R$70,00 for the sale price of a 50-kilo bag. “In addition to this difference, producers are also facing a lack of liquidity in the market,” Velho pointed out.

The director also recalled that the deadline for last year's expenses is approaching. “The next few months, June and July, will be crucial for these commitments made by producers,” he emphasized. Velho asked the federal government to support the sector and recognize that it has no interest in prices that are either too low or too high. “We recognize that there is a consumer on the other side, but we are stating here that there is a production cost, a minimum profitability for the producer to be able to remain in the activity,” he emphasized.

Conab president Edegar Pretto acknowledged the difficult situation of the sector, but recalled that the federal government has been developing actions to balance prices, but acknowledged that the measures have not been sufficient. “I have committed to organizing an interministerial meeting in Brasília next week, involving the Ministries of Finance, Agriculture, Agrarian Development, the Civil House and Conab, to study, together with the rice sector, other alternatives that could make producers feel the “helping hand of the federal government” helping them find this price balance,” he emphasized. Among the possibilities, Pretto mentioned the alternative of the federal government launching a sale option contract. “After 11 years, Conab will once again have rice stocks,” he announced.

Also present at the meeting, the president of Abiarroz, Renato Franzner, highlighted the need to find a price balance in the sector. “Now we have a slightly higher volume than would be normal due to demand and the external market, which includes Mercosur. So we have a challenge, which is to correct the current price, and this sensitivity on the part of the government is very important in creating an instrument to retain some of this rice so that the market can return to a sustainable level for the entire chain. Franzner also emphasized that it is not in the industry’s interest to work with very depreciated prices.