Brazil Paddy Rice Retail Prices Soar 35% from Last Year

According to data from Brazil’s Instituto de Economia Agricola, wholesale prices of paddy rice in November 2012 increased to over 800 real (about $385) per ton , up about 35% from around 575 real per ton recorded in November, 2011.

The UN’s Food and Agriculture Organization (FAO) said that the spike in domestic rice prices in Brazil is due to lower rice production this year. According to FAO, paddy rice production in Brazil is expected to decline to around 11.6 million tons, down about 15% from around 13.6 million tons produced in the previous year.

The reduction in rice production this year is mainly due to decline in acreage (13%) and around 2% drop in average yields in 2011-12 compared to the previous year. The decline is associated to lower price incentives, and water scarcity in the reservoirs during the planting period, said the FAO.

Wheat production is also estimated to decline 15% this year, but maize production is expected to increase 27% to 71.5 million tons this year. The FAO says that rice production is likely to remain at this year’s low levels in 2013-14 as rice acreage is unlikely to improve next year.

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