Brazilian Market
Responds To Worldwide
Soaring Food Prices
Brazil is planning to
suspend rice exports in
an effort to guarantee
supply during the
ongoing food price
crisis in what is one of
the world's main
agricultural nations.
The Brazilian government
has proposed to domestic
rice producers the
suspension of exports of
the grain until the
domestic market can
guarantee ample
production and the
external demand
stabilizes. Rice is one
of the country's basic
food staples.
"We want to come to an
agreement with the
private sector that (the
export suspension) will
last as long as
necessary to ensure that
Brazil will not lack
rice," Reinhold
Stephanes, minister of
agriculture, said
recently.
In general, Brazil does
not have any problems
with rice production.
The yield is expected to
reach 11.9 million tons
in 2008.
Additionally, the
government has a reserve
supply of more than 1.5
million tons bought
directly from producers.
This huge reserve is the
result of the
government's attempts to
secure a fixed price on
the product.
Before the food crisis
broke out, Brazil had
already exported some
500,000 tons of stock
supply and the
government wanted to use
the remaining 1 million
tons to lower the
domestic price.
Producers also have a
surplus of 1.4 million
tons, which they expect
to capitalize on due the
sharp jump in
international food
prices partly caused by
exports suspensions in
major food producing
countries.
The Brazilian market
responded quickly to the
price hike. The price of
a 60 kilo bag of rice
has increased to 39.5
U.S. dollars from 32
U.S. dollars in the
space of a year
Meanwhile, the domestic
demand for rice
increased by 50 percent
in April, resulting in a
48 percent price rise,
according to Jose Souza,
president of the stock
market of food products
in Rio de Janeiro.
Facing this situation,
the Brazilian government
plans to suspend rice
exports and use its
storage supply from May
5, with a goal of
gradually dropping the
price of a 60 kilo bag
of rice to 17 dollars.
In a move to comfort
producers, the minister
of agriculture claimed
that there will still be
the possibility of
exports, saying the
government will reserve
at least 2.5 million
tons of rice for
shipping abroad. |
|
