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.
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"]
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 . "
The government of Honduras has authorized the import of 25,126 metric tons of rice in order to avoid a shortage in the supply of grain in the local market.
"...After arduous deliberation, Honduras has authorized the importation of 25,126 metric tons of rice so as not to be at risk of a shortage of the grain. Although the initial request was to import a total of 30 tons, the tripartite commission only authorized the importation of 25,126 metric tons of grain. "
Private banks in Nicaragua will be granting loans to the agricultural sector in order to address the consequences of the drought across Central America.
$383 million in will be awarded loans. Juan Carlos Argüello, president of the Association of Private Banks of Nicaragua (Asobanp) stated that the agreement was made during a meeting with officials from the Central Bank to assess the impact that the lack of rain will have on production and the country's food supply.
Rice producers fear not being able to sell their rice harvest because of the entry of rice from countries such as Argentina, Brazil and Uruguay at much lower prices than local ones.
"At great risk are 60,000 hectares of rice, for which there is no known market for this production because Costa Rica is being invaded by milled rice imports from southern countries (Argentina and Uruguay)," said the new President of the National Assembly of Rice Producers, Domingo González. "
The next Minister of Agriculture talks about subsidies to "the others" and "unfair competition", but not about the dramatic differences in productivity between Costa Rican rice producers and those "others".
The appointed Minister of Agriculture, Luis Felipe Arauz, has announced that he will review - in order to extend- the deadline set by the outgoing government to liberalize the price of rice.
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.
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.
The Government is standing firm in its position to eliminate state fixing of the price of rice and aims to organize the cooperative sector.
According to Mayi Antillon, chief of Economy, Industry and Trade from March 2014 the price of rice will be unfixed in order to benefit small farmers and reduce the price for consumers.
"It is not possible to debate maintaining fixation which does not benefit small producers," Antillon said, adding that these people do not receive their money at the moment of selling their harvest to large companies.
The Costa Rican government has informed the WTO that from March next year it will cease the pricing system by which domestic rice producers are subsidized.
From 1st March 2014 rice subsidies will be removed, which could end the dispute with the U.S. and other WTO members on account of aid given to rice farmers.
In a statement that the Government of Costa Rica sent to the World Trade Organization (WTO), the country said it will eliminate aid for rice farmers through a decree approved last month.
The National Rice Corporation and the Government have agreed to move towards an alternative to the price fixing scheme.
"It was also decided to establish a process of transition to manage the market and increase productivity in the sector, which should be ready this week," reported Elfinancierocr.com.
The agreement came after the results of the study entitled "Current Mechanism for the estimation and identification of rice prices under the context of the marketing chain," conducted by the Institute of Economics at the University of Costa Rica (UCR) , which indicates that currently, price fixing does not take into account various aspects of the reality of the national and international market.
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