Anuário Brasileiro do Arroz 2011 - Unemat

STRONG CURRENCY Along with
the question of supply, the exchange
rate policy affects the sales. The high
value of the Brazilian currency against
the dollar knocked down the prices in
the domestic market by making shipments
abroad difficult, while facilitating
purchases up to February 2011.
In the meantime, prices in the international
market continued receding,
although somewhat moderately, after
peaking in 2008, smack in the middle
of the “food crisis” announced by the
Food and Agriculture Organization of
the United Nations (FAO).“In March
and April, when upwards of 70% of the
rice was harvested in the Country, the
pressure exerted by the harvest affected
the market more severely than the
question of the exchange rate, since
the prices practiced in Rio Grande do
Sul were varying from R$ 18 to R$ 19,
the parity with the Uruguayan product,
for example, would be R$ 21 to R$ 22
per sack”, explains Élcio Bento, rice
market analyst with Safras & Mercado.
The difference between the import parity
and internal prices was equivalent to
something between R$ 2 and R$ 4, or
US$ 1.25 to US$ 2.50 per 50-kg sack.
If, for one thing, there is no “price
floor” for the domestic scenario, on account
of plentiful supply, on the other
hand, the “price ceiling” is very low,
which is the parity of the price of imports.
This information really causes
concern, since the movement of the
quotes towards the minimum price of
R$ 25.80, charged by the producers,
will represent a soaring trend for imports
from Mercosur. “Currently, these
countries have been strongly in search
of third markets, as they are not interested
in promoting even smaller quotes
in Brazil. But with domestic prices at
R$ 25.80, that is to say, above US$
16, Brazil remunerates better than any
other world market, capturing the at-
tention not only of Mercusur countries,
but of other huge suppliers”, explains
Barreto.
The analyst blames the pressure of
the harvest on the receding prices in
the domestic market. “At this moment,
there are not enough warehouses, transport
costs are high, sales are not running
smoothly and there are excessive
supplies. It is a receding scenario and
the natural fallout translates into depressed
prices”, he ponders. Besides the
record crop in Brazil, all Mercosur countries
are also expecting bumper crops or
new record figures, which will obviously
generate surpluses in excess of 3 million
tons in the economic bloc, something
like 10% of the entire global market.
“This leads to a trend, if the present scenario
holds, of average prices not higher
than R$ 22 over the coming months. A
scenario that will only change if radical
support moves come from the federal
government”, he projects.
OFFER AND
EXCHANGE RATE
EXERT PRESSURE
OVER DOMESTIC
PRICES
33