São Paulo – Brazilian rice exports are on the way up, and Arab countries rank among the top buyers this year. According to figures released by the Rice Institute of Rio Grande do Sul (Irga, in the Portuguese acronym), foreign sales were up 35% year-to-date through May this year from the same period last year, and up 66% from March through May this year from the same period in 2013. The commercial year for the rice crop begins in March, as harvesting usually takes place between February and April.
Year-to-date through May, 557,060 tonnes of rice were shipped abroad from Brazil. From March through May, 383,300 tonnes were exported. In both periods, Cuba was the leading buyer, followed by Venezuela. Year-to-date, Cuba imported 115,300 tonnes and Venezuela imported 87,400. Next in the ranking are Sierra Leone, Senegal, Gambia, Nicaragua, Bolivia, Switzerland, Netherlands and Peru.
Saudi Arabia was the 17th leading buyer of Brazilian rice year-to-date through May, at 4,000 tonnes. Libya ranked 19th at 1.9 tonne. Year-to-date through May 2013, Libya did not purchase any rice from Brazil, and Saudi imported 3.1 tonnes. In other words, Saudi imports were up 30% so far this year.
“Saudi Arabia is one of nine target countries of the Brazilian Rice program. Jordan is another,” says the Irga chief of cabinet and coordinator of the Sectorial Chamber for Rice of the State of Rio Grande do Sul, César Marques. Brazilian Rice is a product promotion project carried out by the Irga, the Brazilian Rice Industry Association (Abiarroz) and the Brazilian Export and Investment Promotion Agency (Apex-Brasil).
The enterprises affiliated with the project take part in initiatives designed to increase exports, such as trade shows and matchmaking, and receive assistance in training, with an emphasis on food security. The promotional actions focus on the project’s selected target countries. Initiatives targeting the Arab world include attending the Gulfood, a food industry fair held in Dubai. Marques explains that the Middle East consumes plenty of rice and that the market’s requirements are the same as Europe’s. He believes exports to the region may increase.
The Rio Grande do Sul Rice Sectorial Chamber for Rice coordinator says Brazilian exports began to rise in 2011, when the country had a bumper crop. At that time, prices dropped to R$ 17 (US$ 7.6 at current exchange rates) per 50-kg bag of shelled rice (April 2011). “Had there not been a government intervention, people everywhere would have gone bankrupt,” he says.
When the market price was R$ 19.20, the federal government set a minimum price at R$ 25.80 and injected R$ 1.2 billion (US$ 538 million) into the sector – i.e. the government paid the different between the market price and the minimum price to growers who exported product. In that year, the product was sold to 74 countries, says Marques. In the following year, the commercial project was implemented in partnership with Apex-Brasil, and exports have grown steadily since, even though the market price is now R$ 36.
Rio Grande do Sul accounts for 95% of all rice shipped from Brazil, according to the Irga chief of cabinet. And the state’s government has also taken action to make rice more attractive and competitive, such as presumed credit of 7% of the ICMS (tax on circulation of industrialized goods), for states where rice is processed and grown locally (up to a maximum of 10% of the rice may be imported). Via these and other actions, the sector’s trade balance has remained on a surplus for the past four years, including 2014 to date.
According to projections from Brazil’s National Supply Company (Conab), the Brazilian rice crop should amount to 12.2 million tonnes in the 2013/2014 season. The prior crop was 11.8 million tonnes.
*Translated by Gabriel Pomerancblum
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