Brazil joins Ecuador’s list of rice suppliers amidst importation needs

Brazil has been added to Ecuador’s list of potential rice suppliers as the South American country seeks to import rice to keep its stocks full, as they have been significantly depleted due to crop issues. To stabilize the market, the Ecuadorian government has imported a first batch of 30,000 tonnes of rice from Colombia, hoping to sell at a retail price of $46 per kilogram in Ecuador. The Minister of Agriculture has indicated that rice imports will not be limited to Colombia but include shipments from Argentina, Uruguay, and Brazil.

The Minister of Agriculture and Livestock, Eduardo Izaguirre, disclosed that even though the retail price of rice from Colombia is $46 per kilogram, the intention is to lower this price. Izaguirre explained, “The entire continent is currently experiencing issues with rice crops, so we aim to bring the price back to our normal range, between $32 and $35.”

Colombia is the initial rice supplier to Ecuador, with private companies opting to import to meet the market demand. Weekly shipments are projected to follow the first purchase of 30,000 tonnes until price stability is achieved. The minister expects that imports could potentially reach 120,000 tonnes.

Supply shortages and price fluctuations are starting to be evident

In addition to Colombia, Ecuador is also collaborating with Argentina, Uruguay, and Brazil as exporters due to their price competitiveness and delivery timeframes. The minister emphasized the need for coordination among these countries to ensure a seamless importation process.

See below the volume of rice shipments from Brazil between Jan 2019 to Apr 2023, according to the DataLiner maritime intelligence service.

Brazilian rice exports | Jan 2019 – Apr 2023 | WTMT

Source: DataLiner (click here to request a demo)

On June 21, President Guillermo Lasso confirmed the importation of rice to protect consumers. He stated, “If the price increases, we will have to import rice to maintain prices.” The president dismissed speculation about industry hoarding, asserting that the private sector will be the one importing.

The current importation strategy aims to address a potential deficit in rice production. Minister Izaguirre explained, “Under normal circumstances, Ecuador typically plants rice on 150,000 hectares during the summer. However, as of the latest data, only 72,000 hectares have been planted. We need to promote planting this month and the next.”

The minister assured that importing 30,000 tonnes of rice from Colombia would not affect the July harvest in Ecuador. The government is closely monitoring production and deficits, continually assessing planted hectares to gauge future supply.

While July shows a small deficit in calculations, importations will continue to avoid potential shortages in August. Minister Izaguirre emphasized that the importations will solely be handled by the private sector, which must adapt as Ecuador withdraws its production.

Moreover, the imported rice will be of superior quality. Izaguirre stated, “Today, it is the highest quality rice because it must compete on supermarket shelves.”

Trading companies from Brazil, Argentina, and Uruguay have initiated negotiations with Ecuadorian counterparts, considering Ecuador a significant destination for rice shipments of up to 200,000 tonnes from the Mercosur region, as confirmed by industry sources.

Source: Planeta Arroz

To read the original news report, see: https://planetaarroz.com.br/equador-poe-brasil-na-lista-de-provaveis-fornecedores-de-arroz/

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