Government announces auction for the purchase of imported rice for June 6th; Product should reach consumers by September

During a press conference, the president of Conab, Edegar Pretto, stated that 300 thousand tons will be purchased and that the government will analyze the need for new acquisitions.

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Due to the floods in Rio Grande do Sul, supermarkets were forced to limit the sale of rice - Photo Reproduction/Taba Benedicto

In an effort to maintain supply and stabilize domestic rice prices and ensure supply, the federal government announced the holding of an auction for the purchase of imported rice. According to the president of Conab, Edegar Pretto, the public auction for the purchase of imported rice will be held on June 6, at 9 am. The government's objective is to acquire 300 thousand tons of rice.

The auction notice was released on Wednesday (29) and establishes that the price will be fixed and the packages will have government identification. The selling price will be R$4 per kilo and it is estimated that the rice will reach consumers by September. The import will be "Processed, Polished, Long Fine, Type 1 Rice", the same as that produced in Brazil.

"We have a great demand for information, both from Mercosur and from other countries," said Pretto, at a press conference this Wednesday. "The government took the decision to withdraw the TEC [import tariff] so that other countries can also enter this auction on an equal basis with the Mercosur countries, which already have zero tariffs," said Pretto.

Reasons for Import

According to the president of Conab, the government's import of grain aims to ensure more affordable prices for consumers. He highlighted that in the last 30 days there was a 30% to 40% increase in the price of rice. The president also mentioned that after the floods in Rio Grande do Sul, rice prices began to rise in Brazil and, later, in Mercosur, as mentioned by the Minister of Agriculture, Carlos Fávaro.

According to Pretto, the state of Rio Grande do Sul is responsible for 70% of the national production of this grain. The intention is to prevent imported purchases from competing with national production. To date, the first 300 thousand tons have been acquired and an assessment of market behavior will be made. If it is perceived that this measure has already stabilized prices, the government will analyze whether it will be necessary to hold a new auction. Given this scenario, the government chose to hold an auction to purchase rice from international suppliers, aiming to increase the supply of the product on the domestic market and, consequently, reduce prices.

Market Impact and Expectations

During this month, the federal government made R$7.2 billion available for the purchase of up to 1 million tons of imported rice. According to the president of the National Supply Company (Conab), this amount of rice must correspond to the losses incurred in the floods in Rio Grande do Sul, encompassing both losses in the field and stored grains.

According to him, there were some difficulties in carrying out a field survey. The sector itself warns that around 600 thousand tons of rice, which were still in the field, were lost and it is not possible to estimate the quantity that was in warehouses and was affected by the waters. The sector also mentions that they are considering that an additional 600 thousand tons may have been reached in the warehouses, totaling up to 1 million tons, and thus, it is estimated that this was the amount lost in Rio Grande do Sul.

Before the tragedy, Conab predicted that the state would harvest a total of 7.4 million tons of rice. The state-owned company plans to publish a new estimate on the 13th. According to the Instituto Rio Grandense do Arroz (Irga), the state has already harvested 90% of its planted area, which totals 6.8 million tons of rice. The institute estimates that, at the end of the harvest, RS would harvest 7.1 million tons, a number very close to that recorded in the previous harvest, which was 7.239 million tons. This proves that rice from Rio Grande do Sul is sufficient to supply the Brazilian market, making the import of the grain unnecessary, Irga stated in a note last week.

After the auction in June, the logistical import and distribution process must be completed by September. This means that, in the third quarter, consumers will already be able to find imported rice on supermarket shelves. Asked why the government decided to sell rice for a maximum of R$4 per kilo, Silvio Porto, executive director of Agricultural Policy and Information at Conab, explained that rice has been one of the factors that have contributed to high food inflation.

According to him, considering retail prices before the climate problem in Rio Grande do Sul, which was around R$25 per 5 kilo bag on average on the market, with the most common brands, a 20% discount was established. based on this parameter, resulting in a value of R$4 per kilo.

News False About Import

In an official statement released this Wednesday, the Ministry of Agriculture categorically denied the veracity of a fake news article that claimed imported rice was contaminated or made of plastic. According to the Ministry, such allegations are completely false. The Ministry of Agriculture highlighted that it is responsible for monitoring all food that enters the country and that the Conab notice clearly specifies the type of rice that will be purchased. Furthermore, the ministry recalled that the government's authorization for the import of up to 1 million tons of rice processed by Conab aims to guarantee food supply throughout the national territory, avoiding possible problems caused by floods in Rio Grande do Sul's production.

The government highlighted that in Brazil inspection and control are carried out by the International Agricultural Surveillance System (Vigiagro) of the Ministry of Agriculture. Phytosanitary procedures and requirements are specific to each type of product, including seeds, seedlings, beverages, foods and agricultural inputs. According to the ministry, it is also false to claim that imported rice is "plastic". The note highlights that the public purchase notice released by Conab for the acquisition of rice clearly specifies that it is "processed, polished, long fine rice, type 1, harvest 2023/2024".