In a new development in Brazil, rice prices have started to decline following a 40% increase over the past year.
As of January, the cost for producers reached R$ 128.83 ($25.8) per sack, up from R$ 91.45 in January 2023.
The spike resulted from global market shifts, including India’s export ban on its primary rice variety due to poor monsoon rains impacting output.
Early this year, prices hit a record high of R$ 131.44 per sack, says Cepea/USP.
However, a slight 5% decrease occurred since January 9, with recent figures showing a price of R$ 124.95 per sack.
Experts anticipate further declines as the rice planting wraps up and harvesting speeds up, particularly in Brazil’s North and Northeast regions.
A more significant price reduction is expected by late February.
Rio Grande do Sul, responsible for more than 70% of Brazil’s rice production, is set to begin its harvest next month.
The state’s output is estimated to increase by 10% in the 2023/24 cycle, reaching 7.66 million tons and contributing to Brazil’s total production of 10.7 million tons (Conab).
Despite the recent domestic price drop, prices are still favorable for producers, leading to reduced exports.
In December, Brazil’s rice exports plummeted by 81% to 53,000 tons, marking a 16.4% decrease for the year.
For Brazilian consumers, rice prices have been climbing since last August, contributing to recent inflation spikes.
December 2023 saw a nearly 6% increase in rice prices, the highest yearly level, per the IBGE’s IPCA data.
This trend highlights rice’s growing impact on overall food price inflation in Brazil.