Arguing that there are justified reasons to increase the price of pile of rice, in Costa Rica the Alvarado administration authorized a 1.9% increase in the final price to the consumer.
With the increase decreed by the Ministry of Economy, Industry and Commerce (MEIC), the price per kilo will rise from $1.06 to $1.08, for the variety with 20% broken grain, also known as 80/20.
As a pressure measure for the government to decree a 1.9% increase in consumer value, in Costa Rica industrialists have decided to suspend from December 2 the receipt of national grain.
According to businessmen, the price increase is pending since June 2019 and they hope that with this pressure measure, the authorities will publish the decree, in which the value of the kilo is increased from $1.06 to $1.08 for the variety with 20% broken grain, also known as 80/20.
For the 2019-2020 agricultural cycle, 67,558 hectares of grain have been planted in the country, an area that exceeds in 5% what was reported for the previous harvest.
92.2% of the total rice crop is unirrigated (62,280 hectares with 988 producers) and 7.8% is irrigated (5,278 hectares of 53 producers), informed the Ministry of Agricultural Development (MIDA).
Between January 2015 and December 2016, the average price per kilo of rice imported by Central American countries fell from $0.46 to $0.35.
Figures from the information system on the the Rice Market in Central America, compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption="Clic para interactuar con la gráfica"]
68% of rice sales in the market are managed by 3 large companies, and 12% of the profits generated by the premiums are concentrated in a single company.
A study by the Chamber of Commerce concluded that the fixing by decree of the price of rice not only did not result in improvements in productivity, but also revealed the way in which the amount of area sown is distributed as well as the profits of rice trading companies in the local market.
The government's decision to forbid the addition of other products as a perk included with sales of rice is another clear example of its efforts to protect an increasingly competitive sector.
The Solis administration has banned, by means of an amendment to the Regulation on the price of milled rice, the addition of other products as a perk included with sales of the grain, a practice known among retailers as "bandeo".
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 increase in 5,800 hectares in the amount of land planted with rice in 2015 will lead to an increase in local production which will reduce imports required to complete supply of the domestic market by almost 50%.
An article on Laestrella.com.pa reports that Jorge Arango, Minister of Agricultural development, said that "... the country has increased domestic production of rice this year, therefore imports of this grain will be reduced ' by nearly half 'what was imported in previous years. "
The subsidy given to producers of $7.50 per hundredweight of rice which expired on December 31, 2014 has been extended by the government until June 30, 2015.
From a statement issued by the Institute of Agricultural Marketing:
The Ministry of Agricultural Development (MIDA), through Resolution No. DAL-298-ADM-2014, resolved on 15 September 2014 to give support to rice producers and representatives from mills, with the goal of levelling out sales prices and purchases in this basic category of mass consumption by the population. Industry sources indicated that the government has been asked to provide financial backing to match the sale price of $24.50 per hundredweight of grain, against the purchase price of $17 offered by the representatives from the mills, on the basis of the provisions of the resolution of 15 September 2014.
Citing the old concepts of food sovereignty, protection is being given to the inefficient production of the few while the consumption capacity of the poorest is punished.
EDITORIAL
As expected, the government of Luis Guillermo Solís has decided to apply the safeguard measure requested by rice farmers, increasing the tax paid on imports of milled rice from 35% to 62%, which in practice only applies to rice bought in Argentina and Uruguay.
In Honduras the Rice Producers Association is negotiating with the government conditions for establishing a reference price and proposing fixing at $18.65 per hundredweight.
Taken from ReporteArroz.com:
New Tender by Iraq leaves Latin America in suspense .
The Iraqi state-owned grain company issued on Monday an international tender to buy at least 30,000 tons of rice, as stated by the Ministry of Commerce.
Instead of liberalizing the price of grain from 2015, the government is considering implementing a gradual deregulation scheme.
In order for the local price of rice to approach the international price, the Costa Rican authorities will substitute, in the first weeks of next year, the decree liberalizing the price of rice and look for "... Another decree which contains a process that allows the price of rice to reach similar (international) levels . "
In Costa Rica a quota for 17,000 tons of rice imported from the US has been rejected, due to the alleged presence of pesticide residues.
Taken from Reportearroz.com:
Asia
Now official: Thailand is the largest exporter of rice
With more than 10 million tons of rice, Thailand was the largest rice exporter in 2014. After India held the lead for two years, Thailand this year will be the most important country in terms of rice exports.
Although a subsidy of $20 million for local production has been approved, calls are being made for the suspension of rice imports, even though the local supply is insufficient to meet demand.
According to industry representatives, the importation of rice has turned into a business which caused extensive damage to the rice industry during the past administration.
The subsidy of $190 million paid by consumers "will not primarily go to producers but to large industrial companies which process domestic crops and who are, at the same time, importers."
In his blog on Elfinancierocr.com, Juan Carlos Hidalgo discusses the singular phenomenon that occurs in Costa Rica, where the rice policy initially intended to protect small rice producers, has become an unjust wealth transfer mechanism between sectors of society.
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