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).
In Panama, the incentive of $7.50 applied to each hundredweight of paddy rice has been extended for the period from July 1, 2018 to June 30, 2019.
The Ministry of Agricultural Development (Mida) reported that in addition to the incentive of $7.50, it has been established that the price of a hundredweight of rice will be $17, (depending on the variations that occur in terms of promotions or discounts), which will be paid by the mills and intermediaries to local producers.
The main distributors have stated that the supply of cereals in supermarkets has been increasing in recent years.
Nacion.com reports that "...Each Costa Rican eats 1.2 kilograms of cereal a year, thus exceeding the consumption of this product by Mexicans, Colombians, Russians and even Japanese citizens."
The requirements for sanitation and traceability are preventing the livestock sector from taking advantage of quotas for meat exports duty free to Europe.
Although the Association Agreement between Central America and the European Union established a quota of 4,800 tonnes per year of rice and a quota of 1,533 tonnes per year of meat, which could enter Europe without incurring tariffs, neither sector has been able to take advantage of them completely.
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 government has announced it will buy 500 million hundredweight and will rent agroindustrial infrastructure to store crops in areas in Panama East, Darien and central provinces.
The 500 hundredweight that the Ministry of Agricultural Development (MIDA) is committed to buying from local producers will serve to supply markets run by the Agricultural Marketing Institute (IMA).
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. "
Despite the fact that grain imports continues to increase, an agreement has been made to raise the price per hundredweight of rice paid by industrial producers to $24.5.
In their enthusiasm to protect domestic agricultural production, the Ministry of Agricultural Development has agreed with producers to increase the price paid per hundredweight of rice produced to $24.50.
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 . "
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