High Supply and Weak Exports Put Pressure on Rice Prices in Brazil, Says Itaú BBA Report

Prices remain under pressure with little fluctuation

The increase in volume from the 2024/25 harvest has continued to put pressure on rice prices in Brazil. According to the Agro Mensal report released by Itaú BBA’s Agribusiness Consultancy, the average cost for a 50 kg bag stood at R$76 throughout April, dipping slightly to R$75 by May 20. Weakened export performance has hindered the flow of production, limiting any price recovery.

Slow market and producers reluctant to sell

Throughout April, prices remained virtually unchanged, averaging R$76.27 per bag. By the end of the month and early May, prices had fallen to R$75.02 per bag. Trade activity was sluggish, with a focus on industry restocking. Many producers only sold when financially necessary, as current prices are often seen as insufficient to cover operating costs.

Harvest is nearly complete, and production has grown nearly 15%

As of May 17, 95.1% of the 2024/25 rice crop had been harvested, according to Conab. Despite April rains that caused lodging and a higher percentage of broken grains, the overall results were positive. The national average yield reached 7 tons per hectare, representing a 7.4% increase over the previous season. With a 6.9% increase in planted area, total production is projected to reach 12.1 million tons, a 14.8% increase over 2023/24.

Falling exports and international competition weigh on the market

Brazilian rice exports continue to weaken. In April, the volume shipped fell 28% compared to March. Despite high domestic supply, competition from countries like Paraguay and Uruguay has made it harder to place Brazilian rice in foreign markets. This loss of competitiveness keeps more rice in the domestic market, preventing a price rebound.

Record global production projection also pressures future prices

The USDA has projected a record global rice crop for the 2025/26 season, contributing to a drop in futures prices in Chicago. The partial average price fell to US$277 per ton in May, down from US$292 in April. USDA estimates global production and consumption will be roughly balanced (538.7 and 538.8 million tons, respectively), with stable ending stocks.

Slow export pace raises red flags in the Brazilian market

The sluggish pace of Brazilian exports is a growing concern. Without a pickup in shipments, prices may continue to decline. The export window is expected to narrow from August onward as the U.S. harvest enters the market. From January to April, Brazil exported 6.6% more rice than during the same period in 2024, but volumes were still 29% lower compared to 2023. Lower prices from Mercosur competitors are also hurting the competitiveness of Brazilian rice.

Tight margins call for attention to management and commercial strategies.

The current scenario requires producers to exercise caution. According to the Rio Grande do Sul Rice Institute (IRGA), the variable production cost in the state is around R$76 per bag. With average prices at this level, many producers are operating with tight or even negative margins, depending on yields. The Itaú BBA report emphasizes the importance of efficient management and well-planned commercial strategies to navigate the sector’s challenges.

Source: Ponta Porã Informa

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