Domestic rice prices prompt Brazilian buyers to resort to importing from Thailand

The off-season in Brazilian rice crops, coupled with stable rice prices in the domestic market, have led ADM to import 60,000 tonnes of paddy rice from Thailand to Brazil. According to industry sources, two ships carrying the goods are expected to arrive between January and February next year and will cater to five packers in the country.

This move is not entirely unusual at this time of the year, as the next rice harvest is scheduled to commence in February 2024, but the import volume outmatches those recorded last cycle.

According to the Brazilian Rice Industry Association (Abiarroz), Brazil imported 909.1 thousand tonnes of rice this year until October, a 21.6% increase compared to the same period in 2022. Brazilian exports fell by 4% in volume, reaching 1.3 million tonnes.

The price of a sack of rice is close to R$120 at the end of this month, according to the Center for Applied Economics Studies (Cepea/USP). The value is 36% higher than the same month in 2022 and has not been seen since the beginning of December 2020, at the height of the pandemic.

In addition to the off-season effects, the firm rice prices in Brazil result from the suspension of exports from India, which is responsible for 40% of the global rice trade. The Asian country decided to restrict sales due to lower monsoon rains, affecting production.

On the Chicago Board of Trade, rice was traded at $17.29 per hundredweight (equivalent to 45.36 kilograms) on Tuesday, with a 4.4% decrease compared to the same period in 2022 and 0.17% above the October average.

In the domestic market, the country will have rice until the end of the year, according to Andressa Silva, executive director of Abiarroz, but the supply flow is less consistent.

Elias Saad, a broker who was formerly the director of the São Paulo Grain Exchange, mentions that there is rice in stock, but producers are taking advantage of the high prices and selling in small lots.

The chart below shows the volume of rice imports from Jan 2019 and Sep 2023. The data is from DataLiner.

Rice Imports | Jan 2019 – Sep 2023 | WTMT

Source: DataLiner (click here to request a demo)

Crop Development

Rio Grande do Sul, which accounts for 70% of Brazil’s rice production, is experiencing delays in planting the next crop due to excess rainfall. Paraguay and Uruguay are also grappling with the weather.

According to the Rio Grande do Sul Rice Institute (Irga), 77% of the area for 2023/24 has already been planted until last week.

The state’s Emater predicts a total production of 7.5 million tonnes, a 4.19% increase compared to the previous season. Still, the estimate may be revised due to excessive rainfall in Rio Grande do Sul, which has delayed planting. The country is expected to produce 10 million tonnes, according to the National Supply Company (Conab), in line with recent years.

Source: Globo Rural

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