BRAZIL-The US Department of Agriculture’s Foreign Agricultural Service (FAS) has revised its projection for rice planting in the marketing year 2023/24 (April 2024 – March 2025) to 1.5 million hectares (ha), up from the earlier estimate of 1.4 million hectares (ha). 

The adjustment in planting expectations signifies the anticipated rise in sector profitability. With the forecasted arrival of the El Niño phenomenon, Rio Grande do Sul is poised for excess rainfall, which favors rice cultivation in flooded areas and might reduce soybean planting, a preferred crop in recent years.

The Federation of Rice Growers Associations of Rio Grande do Sul (FEDERARROZ) notes a historical productivity drop of about 5 to 10% during El Niño periods. 

Despite this, rice prices surged in 2021, largely due to escalating fertilizer costs, emphasizing the farmers’ need to maintain planted areas to balance investments and bolster profitability, especially as production costs began to ease in 2023.

Forecasts for the marketing year 2023/24 increase milled rice production estimates to 7.01 million metric tons (MMT) of milled rice equivalent (MRE), equivalent to 10.3 MMT of paddy rice. 

This reflects a 3% increase, attributed to expanded planted areas and the expected improved profitability for producers, given the signs of relief in rice production costs for the upcoming harvest compared to the previous year.

Estimates for rice harvested areas in the marketing year 2022/23 remain steady at 1.5 million hectares, aligned with ongoing producer interest in rice cultivation. 

Milled rice production for the same period is maintained at 7 million metric tons (MMT) of milled rice equivalent (MRE), indicating yield estimates of 7 MT/ha for 2022/23. 

This period continued the trend of reducing rice cultivation area, primarily due to production costs, prompting the substitution of rice with alternative crops like corn and soybeans.

Rice sowing, deeply rooted in tradition and essential for the soybean-rice rotation cycle, is integral to the region’s agricultural practices. 

This rotation system, endorsed by the Federation of Rice Producers of Rio Grande do Sul and supported by the Rio Grande do Sul Rice Institute, is known to decrease production costs by up to 15% and potentially enhance rice yields by 10 to 20%, contingent on land conditions. 

Notably, some areas in the state with poor drainage are ideally suited for irrigated rice, dissuading farmers from altering crops. 

Rice exports to increase slightly 

Post has also raised its forecast for rice exports in the marketing year 2023/24 to 1.1 MMT from the earlier estimate of 900,000 MT. 

This upward revision is due to the sustained international interest in Brazilian rice and an anticipated decrease in supply from key exporting nations. 

In contrast, the forecast for rice imports in the same period has been adjusted downward to 950,000 MT, reflecting a 3% decline from the previous estimate. 

This adjustment is based on the expected reduction in crop production from traditional rice exporters to Brazil, specifically from Mercosur countries like Paraguay and Uruguay.

In the marketing year 2022/23, Post revised its rice exports to 1.2 MMT, an increase from the earlier projection of 1.1 MMT. 

Despite surpassing the previous forecast, this new export figure remains 16% lower than that of 2021/22, primarily due to the reduced availability of crops for the current harvest.

According to the Ministry of Development, Industry, Commerce, and Services (MDIC), Mexico remained the primary destination for Brazilian rice in 2023, accounting for approximately 27% of Brazilian rice exports.

 Following Mexico were Venezuela (17%), Costa Rica (12.6%), Senegal (10.6%), and Gambia (6%).