Agriculture, Rice
December 20, 2024
Brazil rice prices hit nine-month low amid depreciating real
By Iara Lima
HIGHLIGHTS
Brazil rice prices plunge to $669/mt amid currency depreciation against US dollar
Offers for 5% broken, parboiled white rice plunge more than $200 since May
Weak demand, excess inventories, new Paraguayan crop set to pressure prices further
Rice prices in Brazil hit a nine-month low, as the market grappled with the impact of the Brazilian real's depreciation against the US dollar to a record low of Real 6.26/$1.
The currency's sharp decline has led to a notable drop in rice prices, with Platts assessing Brazilian 5% broken and parboiled white rice at the lowest level in nine months. Additionally, offers for both types of rice were at $670/mt in the week ended Dec. 19, a plunge of about $200 over the last seven months.
Platts, part of S&P Global Commodity Insights, assessed Brazilian WR 5% broken and PB 5% at $669/mt FOB Dec. 19, down $27 day on dayamid ongoing challenges in the market. In comparison, the market saw peak prices in mid-May, when the same assessment hit $900/mt.
"Customers were seeking to buy at the same prices they were paying one year ago, but offers are higher now, and last year's prices are not workable," an exporter said.
In addition to the currency depreciation, rice producers in Brazil have been contending with rising costs and fluctuating demand.
"The exchange rate in Brazil reached its historical peak this week, which is very bad for our country, but which allows us to reduce prices for exports," a source in Brazil said. "So maybe the exports are taking the opportunity of this exchange rate to confirm shipments at those very low levels, but I'm surprised; I didn't imagine it would go that low."
A source in Paraguay said, "The exchange rate is also impacting the price that the Brazilian market is willing to pay."
Looking ahead, market participants anticipated that the combination of the depreciating real, seasonal pressure andthe Paraguayan new crop entering the Brazilian market would continue to influence rice prices.
"December usually is weak in terms of sales," a source said. "In January, we are starting to see the Paraguayan crop reach... the Brazilian market, and the Brazilian crop will be underway, putting pressure on paddy prices and consequently on white and parboiled prices."
