BRAZIL- Brazil could produce its lowest rice crop in 25 years in the marketing year 2022/23 at 7 million metric tons (MMT), according to a Global Agricultural Information Network report from the Foreign Agricultural Service (FAS) of the US Department of Agriculture (USDA).
The USDA report attributes this low yield to a prolonged drought in Rio Grande do Sul, the major rice-producing state, and low profitability for farmers.
According to the report, farmers record minimal profits, pushing them to invest more in planting corn and soy, which yield better profits. As a result, Brazil’s rice area has decreased by almost 40 percent in the past decade, though improved yields have kept productivity relatively high.
Additionally, there has been a surge in fast food consumption among Brazilians as people seek convenience, reducing the local demand for rice and other grains.
Moreover, Brazilians mostly pair rice with beans, which require a long cooking time, prompting many Brazilians to reduce consumption of this meal in favor of shorter preparation times.
For MY 2023/24 (April 2024 – March 2025), the USDA report forecasts rice planted area at 1.38 million hectares (ha), a downward trend pushed further by high maintenance costs.
Additionally, the initial milled rice production forecast is 6.8 MMT of milled rice equivalent (MRE), an equivalent of 10.13 MMT of paddy rice, a 1.7 percent drop consistent with the decrease in planted area.
However, for MY 2023/24, there could be a slight increase in yield at 7.32 MT/ha, a 4.7 percent increase in productivity from the 2022/23 harvest.
According to the USDA initial forecast, rice exports for MY 2023/24 could reach 1.1 MT, thanks to continued interest in rice in international markets and the expectation of favorable grain prices.
However, the USDA decreased its estimate for rice exports for MY 2022/23 to 1 MMT based on the prediction of lower availability of rice in the domestic market, which will likely improve rice prices in internal trade.
Corn and wheat to post record harvests
Brazilian corn production will likely exceed expectations, with 22.8 million hectares (ha) expected to go to corn in MY 2023/24, a 1.3 percent increase in the current season as demand for corn domestically and internationally increases.
Post predicts that the favorable weather Brazil is enjoying could result in corn production of 133 MMT, up 6.4 percent from the current season estimate, with corn yield for MY 2023/24 set at 5.83 MT/ha.
“However, Brazil’s logistic burdens, lack of storage facilities, and transportation challenges methods, aligned with higher production costs, remain a hurdle that could hamper the country’s production numbers,” the USDA said.
Nevertheless, an expected increase in average international prices amid global supply chain disruptions pushes the corn export forecast for MY 2023/24 up 8% at 54 MMT.
Imports will likely reduce to 1.2 MMT in MY 2023/24 to more extensive national production.
For wheat, growing investment in technologies, including new resistant cultivars adapted to dry climates and more resistant to diseases, provide for record production numbers.
Post sets its initial forecasts for wheat planted area at 3.2 million hectares, roughly 3% higher than the previous season.
Additionally, the availability of idle land during the winter season is likely to inspire the planting of wheat in Brazil. Furthermore, the possibility of an increase in international demand for wheat, as drought affects the Argentine crop, the Russia-Ukraine war, and decreased production costs increase the optimism of Brazilian producers towards the 2023/24 wheat harvest.
Post sets its initial forecast for wheat export to 4MMT as the quality of the Brazilian wheat improves (featuring 12.5% protein content) and draws the interest of non-traditional markets, such as Bangladesh.