In the context of a drop in production, in Costa Rica the government decreed a rise from $36.18 to $37.65, the price of a 73.6 kg sack of rice in bulk placed in the industrial plant.
The agreement modifying the price to the rice producer was published on June 5 in La Gaceta, and the government's action is taken in a context of low local production, because between the 2016-217 and 2017-2018 harvests, the volume produced decreased by 21%.
In Costa Rica, a bill under analysis in Congress would force industrialists to contribute to the National Rice Corporation with an additional 5% of the value of the rice purchased under import schemes due to shortages.
Although the aim of the two bills that are being discussed in the assembly is to comply with a resolution of from the Sala IV (4th Court) which ordered consumers to be incorporated into the board of directors of Conarroz, it was also used to modify in the law texts other aspects to which industrialists are opposed.
84 thousand hectares of crops were flooded and 67 thousand kilos of trout and tilapia, 24 thousand hens and about 7 thousand tons of sugar were lost because of storm Nate.
The impact of the climate phenomenon was felt in most agricultural activities in the country, and although shortages are not foreseen in sectors such as rice and sugar, in others supply could be affected in the coming months.
The Commission for the Promotion of Competition is opposed to the fixing of grain prices, the only good in the country whose price is established by decree.
Although Corporación Arrocera Nacional (Conarroz) continues to insist on the negative effect of freeing up the price of rice, the Commission for the Promotion of Competition (Coprocom) is maintaining its stance against the measure, arguing that it has not served to increase the volume produced or improve the productivity of the rice sector.
Imports of husked rice grew by almost 200% between the periods 2011-2012 and 2015-2016, and even when paying a tariff of more than 35%, imports easily compete with the subsidized local product.
The competitiveness of imported rice is such that"... it is estimated that for the current period (1 July 2016 to 30 June 2017), purchases will reach 54,000 tons.That is almost three months consumption, in that presentation alone."
The decree declaring a shortage authorizes the purchase of paddy rice for the period January to June 2017.
The decree authorizing an import quota for paddy rice due to shortages in the domestic market, was published on Wednesday in the Official Newspaper, La Gaceta.
Estimatations of national consumption for the period 2016-2017 are of 340,000 tonnes of paddy rice, 53% of which is covered by domestic production, equivalent to 180,000 mt; 21.5% by imported rice, under the DR-CAFTA, equivalent to 73,000 tonnes and 7.0% from the Southern Cone, equivalent to 24,000 mt, leaving a shortfall of 63,000 mt, which will be covered with the decree of a shortage.
In the next few days the government plans to publish a decree declaring a shortage and authorizing the import of duty-free grain.
Due to a decline in local production, there will not be enough stocks to meet demand from January 2017, therefore the import of about 70,000 tons, free from the 33.10%tariff, has been authorized.
The chairman of the Board of the National Rice Corporation (Conarroz), Eliécer Araya, told Nacion.com that "... The need to import is now stronger because of a smaller domestic crop. About three years ago the proportion of consumption of national productionwas 60% and this has now gone down to 50%. "
The gap gets bigger and industrialists have once again brought the subject up for discussion by asking for a repeal of the decree which since June 2015 has fixed grain prices in the country.
Despite the fact that since 2009 the international price has been consistently below the local price, in Costa Rica the government insists on protecting producers, who are opposed to the request made by industrialists to eliminate the decree which has kept prices fixed since June 2015. The formal request for derogation was submitted in November 2015 by the National Association of Manufacturers in the Rice Sector (Aninsa).
Denouncements have been made over distortions in the rice market where a supermarket chain and four other major players are on the receiving end of benefits from a perverse price fixing system.
An article in Nacion.com reports that former President of National Assembly of Rice Producers notes that these market actors, whose interests would be seriously affected by the liberalization of grain prices, "...
Between 2008 and 2013 the size of areas sown with rice in the north of the country increased by 92% and in the Caribbean coast they declined by 86%.
The moisture level of the soil together with other related factors to climate and characteristics of each area have led rice farmers to shift the main areas of cultivation from the Atlantic region to the Northern region.
The center-right presidential candidate in Costa Rica says he would mantain the extension on the liberation of rice prices.
The presidential candidate of the Citizen Action Party, Luis Guillermo Solis said that a new government would keep the six month extension that has been ordered on the liberation of the price of rice.
"... The Executive deferred the measure until 1 March 2015 after talking with the sector.
A request by the National Rice Corporation for a protectionist trade measure is being analyzed by the government.
The Costa Rican government is discussing the possible application of a safeguard measure on imports of rice from Argentina and Uruguay. The measure was requested by the National Rice Corporation (Conarroz).
"The review process has been started and now we will wait and see.
The extension of the deadline for the implementation of the decree that eliminates the rice price fixing mechanism, represents a transfer of $75 million from the pockets of consumers towards the rice sector.
For years other countries have criticized the pricing of rice in Costa Rica considering it a subsidy and violation of defined limits.
" ... The maximum allowance agreed for the sector is $15.94 million per year but for 2013 it has been estimated at $75 million. Violation of the agreement is grounds for a complaint, which could attract sanctions against Costa Rican exports from some partners."
The National Rice Corporation is calling for the system of price regulation that protects domestic production while keeping consumer prices high.
Representatives of the National Rice Corporation (Conarroz) asked the Government to repeal the provision that any regulatory system to determine the price of rice will be eliminated this year as established by a decree issued in May.
Corporación Arrocera de Costa Rica has invested $3 million in order to increase its production capacity by 60 million quintals per month.
Elfinancierocr.com reports that "Despite being in a competitive market where there are many brands and companies involved, Cacsa claims to have about a 20.3% share of the rice market. Its business is integrated because it produces grain, it industrialises it, markets it under its own brands, packages it and attends to distribution as well. Its brands include Imperio, Llanero and Tío Felipe, but it also packages for private labels. "
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