Brazil witness largest rice import volume in almost two decades

In 2023/24, Brazil witnessed its highest volume of rice imports in nearly two decades, as stressed by Evandro Oliveira, an analyst and consultant at Safras & Mercado, during his presentation at the 7th Safras Agri Week.

Oliveira noted that the year commenced with a notable surge in external purchases. Similar to February, March is projected to see a greater influx of imported products compared to exports. The total exports for the 2023/24 season amounted to 1.7 million tons, while imports reached 1.6 million tons.

According to the analyst, this surge in imports is a significant factor contributing to the ongoing decline in rice prices since January. Market pressure began mounting in October 2023 due to weakened demand in the Brazilian market.

“Rio Grande do Sul, the country’s largest rice-producing state, is facing delays in harvesting, potentially leading to a shorter export window,” he reported.

Average prices have stabilized at around R$100 per sack. Oliveira mentioned that sales were sluggish between February and March, resulting in minimal market liquidity. Consequently, some industries are adjusting their prices.

Uncertainties loom over the upcoming rice crop in Rio Grande do Sul, primarily due to adverse weather conditions. Heavy rains and winds exceeding 100 kilometers per hour have battered and flattened the crops, adversely affecting productivity. In some regions initially estimated to yield 200 sacks per hectare, harvests are now yielding as low as 180 sacks per hectare.

El Niño effects on Mercosur

Similar to Rio Grande do Sul, storms triggered by the climatic phenomenon El Niño have impacted Brazil’s key trading partners in Mercosur, leading to expectations of reduced exportable supplies from these countries. Oliveira highlighted that Paraguay is anticipated to export about 100 thousand tons less, while Argentina may witness an increase of 100 thousand tons if crops recover.

“With this scenario, projections suggest that Brazil may need to import approximately 50 thousand to 100 thousand tons more, which should help maintain stability in our trade balance,” the analyst estimated.

Paddy Rice

Regarding estimates for the 2023/24 paddy rice crop, Oliveira mentioned that Rio Grande do Sul may experience lower yields than initially expected due to adverse weather conditions.

However, compared to the previous season, projections are optimistic. Rio Grande do Sul is expected to produce 7.451 million tons, up from 6.995 million tons in 2022/23. Santa Catarina is expected to produce 1.308 million tons. In Mato Grosso, expectations point to nearly doubling the paddy rice area, from 95 thousand hectares to 131.3 thousand hectares.

Overall, national production is estimated at around 10.6 million tons, marking a 6.6% increase compared to 2022/23. However, Oliveira cautioned that this increase may not be sufficient to exert significant downward pressure on prices.

“We are beginning the commercial season with the lowest stocks in two decades, with some reports indicating holdings of less than 500 thousand tons by producers and industries,” he concluded.

Source: Agência Safras

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