D
espite the shortfall of almost 1.5
million tons in the 2015/16 crop
year, prices fetched by a 50-kilo-
gram rice sack show quite a dif-
ferent behavior in the quarters
of the commercial year that started in March
2016 and finished in February 2017. At the
peakofharvest,pricesdroppedfromR$47to
R$ 39, on average, in almost all regions inRio
Grande do Sul. In Santa Catarina, they fell to
R$ 37 per sack and, in Mato Grosso, 60-kilo-
gramsacks fetched less thanR$42.
The pressure of offer in the first four
months of the semester, brought about by
cash-strappedricefarmers,andafloodofim-
ports fromMercosurwere responsible for the
fall. Brazil began to export more, taking ad-
vantage of the momentary competitiveness
of the domestic prices, and the demands
from South and Central America, Caribbean
and Africa were a good help. Under such cir-
cumstances (and the accumulation of good
stocks by the industry), supply remained on
a par with domestic demand. Domestic pric-
es gradually rose, and ended up reaching R$
50.50 at the beginning of the second half of
the year (August and September) in the Rio
Grande do Sul production hubs. In Santa
Catarina prices peaked at R$ 49 and in Mato
Grosso, at R$65.
For a production cost ranging from
R$ 45 to R$ 46 a sack, on average, in Rio
Grande do Sul, the price was remunerat-
ing. The fact is, most farmers sold their rice
right after harvest, and many of them sold
it belowproduction costs. The situationag-
gravated the credit crisis, which had been
badly affected by the losses caused by the
El Niño phenomenon.
“Rice farming in South Brazil is going
throughdistinctrealities.In2016,manyfarm-
ershadnocashflowproblems,especiallythe
ones that use high technology, usually land
owners who have adhered to crop rotation
practices, soybean in association with live-
stock operations, and their profits, in some
cases, amounted to R$ 3 thousand per hect-
are”, says Henrique Dornelles, president of
the Federation of Rice Growers Associations
in Rio Grande do Sul (Federarroz). “There
were farmers who lost their entire crop, and
hadnoinsurancecover,inconsequence,they
GREATPRICEOSCILLATIONINTHE2015/16
GROWINGSEASONISSTILLREFLECTINGONTHE
MARkETOFRICEINTHEHUSkANDADVERSELy
AFFECTSTHERICEFARMERSINSOUTHBRAZIL
hadnoaccess tocredit lines andarenowfac-
ing serious difficulties. The majority suffered
losses, either total or partial, andendedup in
the red in the2015/16growing season.”
ExTENSION
The low prices in the
Brazilian market from March to May 2016,
compared to the production costs, are still
impacting upon the rice sector. “Without
any official credit, and with losses, lots of
farmers depended on bank loans, at mar-
ket interest rates, and on suppliers and buy-
ers, under tight rules and repayment plans”,
argues consultant Carlos Cogo. “It means
that, despite some delays in the harvest of
the 2016/17 crop, stemming from occasion-
al climate-related events, again there will be
a supply concentration, coming from cash-
strapped farmers, and thosewhomadeprof-
its in 2016 should make profits again in the
2017/18 crop year”. The reflections were felt
inFebruary,withprices fallingmore than5%,
andin15daysinMarch,whentheyplummet-
edmore than 11.5%, according to the Esalq/
Senar-RSprice indicator.
Past
butpresent
Indebtedness and no access to credit lines are taking a toll on the farmers
42
Fonte:
Mapa
Valor Bruto de Produção (Arroz)
NO BRUTO
GROSS VALUE
Ano
2016
2017
%
VBP
10.197.687.882 11.998.047.900 17,7
