Brazil’s largest rice producer, Rio Grande do Sul state, should export 250,000 tons of the grain this year, which will represent a growth of 416% when compared to last year. In 2004, the state sold 60,000 tons of rice to Europe, Africa, Latin America and the Caribbean countries.
So as to increase foreign sales, the rice producers are negotiating with new markets, like those of the Arab countries, which are great consumers of the product.
The first sale to that region of the world may go to the United Arab Emirates.
“A trading company from Dubai has already shown, through contacts with the Federation of Rice Associations of Rio Grande do Sul (Federarroz), interest in purchasing Brazilian rice,” explained the market director at the Federarroz, Marco Aurélio Tavares.
If the deal is closed, this will be the first time the United Arab Emirates will import rice from Brazil. Tavares guarantees that Rio Grande do Sul is capable of supplying the rice consumption needs of the Arab countries.
Apart from the Emirates, the Federarroz director stated that Saudi Arabia is another potential market for Brazilian rice. Every year the Saudis import 1 million tons of grain. According to figures supplied by the United Nations (UN) Food and Agriculture Organization (FAO), the country is the fourth largest rice importer in the world.
Exporters from the state of Rio Grande do Sul also have their eye on Iraq, which currently buys from Uruguay, among other buyers.
Tavares believes that interest by Arab countries, like the Emirates, in alternative suppliers may be explained by the reduction in the harvest of traditional suppliers like Indonesia, Sumatra and Sri Lanka, due to the tsunamis that affected the harvest at the end of last year.
The FAO estimates that the damages caused by the tsunamis to the rice fields in those countries should cause a 14.6 million ton reduction in the crop, equivalent to 2.4% of the world harvest this year.
According to Marco Aurélio Tavares, who is also a councillor at the Rio Grandense Rice Institute (IRGA), the drought in the state will not alter the product export forecasts.
“Rice losses caused by the drought had already been calculated when we prepared our export forecasts for 2005,” stated Tavares, who estimated a 10% loss in the harvest. The initial forecast was for a harvest of 6.3 million tons.
The increase in Rio Grande do Sul rice exports started in 2003, when the IRGA, Federarroz and the State Agriculture and Supply Secretariat prepared a joint strategy to stimulate foreign sales of the product.
In 2003, cooperatives started sending 10% of the rice production of their associates to the foreign market. For this purpose, they established an export pool coordinated by the Federarroz. The cooperatives answer, annually, to 40% of rice production in Rio Grande do Sul.
Export was one of the exits found by the farmers to reduce losses caused by the arrival of Uruguayan and Argentine rice on the Brazilian market which, due to the Mercosur, the customs union between Brazil, Argentina, Uruguay and Paraguay, arrives in Brazil at being less taxed than the Brazilian product.
Taxes paid for the import of rice from Uruguay are 14%, whereas from Argentina they total 16%. Taxes on the Brazilian product are as high as 40%, reducing the competitiveness of the product when compared to that produced by neighbouring countries.
ANBA – Brazil-Arab News Agency