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.
Source:Xinhua
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