Court suspends injunction and federal government rice auction continues
The Lula government intended to hold an auction to minimize the impacts of the tragedy in RS on supplies. However, this auction was vetoed by an injunction, which was requested by parliamentarians from the Novo Party, which is in opposition to the government.
Government will import rice to serve small traders - Photo Reproduction/Infoglobo
The president of the Federal Regional Court of the 4th Region, Fernando Quadros da Silva, granted the request from the Attorney General's Office and authorized the auction to purchase rice. This measure was requested by the federal government in order to guarantee reserves and contain possible increases in product prices. Members of the Novo party, in opposition to the government, had taken legal action to block the purchase on an emergency basis. The AGU presented an appeal, to which the president of the TRF-4 agreed.
In his decision, the judge declared that the risks of significant damage to the rights legally protected by applicable legislation, resulting from the effects generated by the injunction initially granted, were evident, in particular, the serious damage to public and administrative order. Therefore, the auction scheduled for today has been confirmed. An urgent communication order was issued to the bodies responsible for conducting the purchase. Conab confirmed that the auction would go ahead as planned.
Floods in Rio Grande do Sul
After the start of the floods in Rio Grande do Sul, the government chose to import rice. The state is responsible for 70% of national grain production, but most of it had already been harvested before the floods. On May 7, the Minister of Agriculture, Carlos Fávaro, stated that the government decided to purchase rice to avoid rising prices, due to the transportation difficulties faced by the state. He also mentioned that at that time, no wholesaler had enough stock for more than 15 days.
Purchase of Grain
The government seeks to acquire 300 thousand tons of rice. In the statement released on May 29, it was informed that the price will be fixed and the imported packages will have the Conab and Union logos, along with the inscription "Product Acquired by the Federal Government". The sales price of the product will be set, being R$ 20 reais for 5 kilo packages, that is, R$4 per kilo. The rice is expected to be available to consumers by September. "Rice Processed, Polished, Long Thin, Type 1" will be imported, which is the same type produced in Brazil.
Non-Market Impact
The federal government announced that it allocated R$7.2 billion to purchase up to 1 million tons of imported rice this month. According to the president of Conab, this quantity of rice should cover the losses caused by the floods in Rio Grande do Sul, including both losses in the field and in warehouses. However, there were some difficulties in making an accurate survey of losses in the field. The sector also warns that approximately 600 thousand tons of rice were lost in the field, and there is no way to estimate the amount affected in warehouses.
Furthermore, it is considered that another 600 thousand tons may have been reached in the warehouses, thus totaling 1 million tons estimated as losses in Rio Grande do Sul. The logistical process of importing and distributing the auctioned rice must be completed by September, which means that consumers will be able to find imported rice on supermarket shelves in the third quarter.
