Bloomberg News

Brazil Starts Rice Exports to S. Africa, Competes With Thailand

July 28, 2011

July 28 (Bloomberg) -- Brazil has begun shipping rice to South Africa, competing with Thailand, the largest source of the grain for Africa’s biggest economy.

A shipment of rice from Brazil’s Santa Catarina state left Sao Paulo bound for South Africa this week, Tarciano da Silva, an export agent for a rice export union in the state, said in an interview on the sidelines of the Rice Africa Outlook conference in Durban, South Africa yesterday. Brazil is South America’s biggest rice producer.

“We began exploring markets in 2009 when we formed the union Sindarroz,” said da Silva. “We identified South Africa as the best potential market for our par-boiled rice. Yesterday we closed our first shipment from 18 of these mills, and we are aiming at an initial average of 40 containers per month.” That’s equivalent to 1,000 metric tons.

South Africa, the third-biggest rice importer in Africa after Nigeria and Ivory Coast, has almost doubled its consumption of the grain since its first all-race elections in 1994 to 760,000 tons a year, according to U.S. Department of Agriculture forecasts. The increasing wealth of the country’s black majority has led to a shift to rice and bread as staple foods, away from corn meal, in which the country is self- sufficient.

Forty-two rice mills in Santa Catarina formed an export union in 2008 to export the state’s surplus rice production, da Silva said. The mills specialize in par-boiled rice, a staple food of the southern Brazilian state with the highest standard of living in South America.

“Instead of having a surplus for the domestic market which will reduce the price, the mills will export their surplus,” said da Silva.

Thai Competition

Sindarroz aims to compete with Thai rice. The Brazilian rice will be pre-packed, he said. The exporting mills are aiming to increase their production by about 30% over the next year, according to da Silva.

Brazil’s annual production is forecast at 7.9 million tons this year, according to the USDA. South Africa produces almost no rice.

Rice prices on the Chicago Board of Trade have risen 18 percent this year, with rice for September delivery trading at $16.805 per 100 pounds today.

--Editors: Antony Sguazzin, Karl Maier

To contact the reporter on this story: Niki Moore in Johannesburg at nmoore19@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net


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