The producers questioned that the values in Uruguay are between 25 and 30% more expensive than in other countries. The exchange rate delay, another factor.
The cost structure of the Uruguay, what is between 25 and 30% more expensive that in other countries, caused more and more producers to export rice without industrialization, after which the sector estimates that this year a 40% of the harvest can be marketed abroad with shell and direct from the farm, to the detriment of the local industry.
In a country that has some 500 producers and ranks among the first places worldwide in this type of exports, according to the National Institute for Agricultural Research of Uruguay (INIA), businessmen in the sector question the lack of competitiveness and high production values, that they calculate in $2,000 the hectare.
In that framework, Alfredo Lago, president of the Rice Growers Association (ACA), highlighted the sector for “a efficiency almost unbeatable” in terms of productivity and quality, in dialogue with La Mañana newspaper. However, he admitted that there “idle industrial plants” and attributed it to “high production costs.”
How high costs impact industrial activity and employment
For Lago, it looks a “dismantling” industrial activity that directly impacts job loss and general employment capacity. Summarizing the situation, he maintained that last year a 30% of the rice was sold with the husk and it is expected that in 2023 that amount will rise to 40%
Uruguay sells rice to more than 60 countries, according to data from the HERE. Due to the loss of competitiveness, today producers choose to sell the unindustrialized rice to other countries, which then process it cheaper, since it is more profitable for them.
Paradoxically, it is expected that the harvest of rice It is one of the crops that is not so affected by extreme drought, as it is low-irrigated. In fact, the estimates for this harvest are positive and it is even believed that it can overcome the 9,000 kilos per hectare.
Faced with this scenario of direct sales from the farm to the outside, Lake questioned the government and compared the situation with the past, “when people were not allowed to leave not a kilo of unprocessed rice from the Uruguayan border”. In any case, he admitted that this administration is “more vigilant” but “without changing macroeconomic policy.” He even predicted that “we are going to a country of commodities.”
Source: Ambito
