Government prepares for the next day strip prices for rice.
Newspaper La República, August 27, 2015, Bogotá.
The mechanism will be applied in Colombia for rice price range, it aims to stabilize producer prices and prevent price rises affecting consumers. The rise of the dollar increased the cost of rice production in the country.
Fedearroz, the national rice Guild recognizes that the dollar is impacting production costs of farmers, hopes that this factor is not conducive to new highs for the end consumer. In that sense, the national government, the rice milling industry and they took action on the matter, and during National Rice Council, agreed on the activation of a new price range. An industry source told the newspaper that said the strip has a value (minimum) ‘floor’ and a ‘ceiling’ (maximum), which aims to stabilize producer prices and the consumer.
At present industry pays the rice producer in the Department $ 143,000 for each load of grain, value is in line with production costs, the source said, although he said the producer price has been stable in the last 40 days This situation may change and the price paid can increase if shortages or may fall if oversupply.
With fringe, when the value of the load is close to the price ‘ceiling’, this indicates that there is a shortage of grain in the country, which will serve the National Rice Council to assess the possibility of allowing imports of cereal. If, however, the value of the load is kept in the price ‘floor’, this indicates that there is a normal supply of rice in the domestic market.
It is expected that this strip is like a shield for the producer price and the consumer price are not affected, the source said. Prices ‘ceiling’ of the rice burden left in Espinal and Ibague $ 153.000y $ 154,000, respectively.
Grow rice costs more
The increase in the dollar, which this week surpassed 3,200 pesos, increased costs rice production in the country due to rising input prices and imported fertilizers.
According to Rafael Hernandez, general manager of Fedearroz, the imported component costs for rice production in the country reached 35%. If this value is applied to the devaluation of last year, it is almost 50%, then this will increase by at least 20% or 25% of production costs. Agrochemicals, fertilizers and inputs are more expensive today.