Inflation is affecting at least 93% of the products in the family basket. Despite the fact that rice is one of the few that still remains below the prices of a year ago (with a variation in its annual CPI of -11.97%), This cereal, basic in the Colombian diet, is also being affected by price increases.
(Rice consumption could be down).
A low production in 2021, added to the effects of unemployment and the rise in inputs were the perfect storm for rice to be infected, little by little, by inflationary pressures. “Through Sipsa (Agricultural Sector Price and Supply Information System) we see that, for example, rice is already seeing positive contributions and variations, after many days and months contributing negative points to inflation”indicated Juan Daniel Oviedo, director of Dane, in the last installment of the IPC.
But in the case of rice, the price increase is the recovery of the lost value in 2021. Sandra Avellaneda, director of the Andi Induarroz Chamber, clarified that like other crops, the cost of planting and producing rice has been affected due to the higher cost of agro-inputs, but that in 2021, unlike other products, rice was one of the few foods that reduced its price, due to expectations of overproduction.
“The national production of rice and the final price to the consumer depend on many factors: the planted area, the weather and the conditions of supply and demand,” Avellaneda said, and reiterated that the industry’s commitment is to offer the consumer quality rice at a fair price.
(Inflation would rise to 7.35% in February).
The latest National Dane Mechanized Rice Survey, which collects data from the second half of 2021, showed how the production of this food fell by 6.2% compared to the same period in 2020, going from 2,258,926 to 2,117,930 tons. The semi-annual report indicated that the planted areas also decreased by 24.8%.
This fall in production is one of the factors that has affected the price of grain and is precisely due to the rise in agro-inputs, fertilizers and even oil.
Rice production fell 6.2% in the second half of 2021 compared to 2020.
Archive
FROM OVERPRODUCTION TO HIGH COSTS
The resistance of rice to inflation had its origin in an overproduction due to the restrictions of the health emergency. This was explained by José Manuel Suso, manager of Arroz Blanquita, a company that works more than 30,000 hectares and has two plants, in Jamundí (Valle) and Aguazul (Casanere).
“When they locked us up, people bought rice, eggs and toilet paper. That increased consumption until May 2020, and the price rose 20% for the farmer and disproportionately stimulated planting “he pointed.
2020 then closed with an oversupply, but in the first quarter of 2021 there was also a drop in consumption that according to the businessman was 17%, a fact that he attributed to prolonged quarantines and closed restaurants. Thus, the profits of the farmers were affected, and according to Suso they fell by 36%.
(Inflation in Colombia: are there estimates of when it would begin to fall?).
Another unexpected turn for rice farmers came with the national strike blockades that increased the price of fertilizers, already made more expensive by the global input crisis.
Freddy Bahamón, a farmer from the village of San Alfonso, in Villavieja (Huila), stated that a year ago a bundle of agro-inputs was at $170,000, and now it is at $220,000. “To take out a load of rice, the hectare costs more or less $9 million,” he added. Bahamón emphasized the situation of low costs in 2021, as a result of the oversupply.
“It was a year of total crisis for the rice line, today it is $180,000 a load of rice, a year ago it was at that price, but then it fell to $114,000,” he said, and assured that the cost of the harvesting machines rose due to increases in fuel.
With revenues compromised, the increase in agro-inputs led to a decline in production, and cereal would be becoming more expensive. “Rice has a low price, but it has already started to rise. We are recovering the price of 2020, and that stimulates planting, however, the inputs have not been normalized “clarified Suso, who estimated that the kilo could reach $3,500.
LAURA LUCIA BECERRA ELEJALDE
LEIDY JULIANA PEÑA SOLANO
