Brazil, the largest rice producer in the Western Hemisphere, is forecast to import 1.3 million tons of rice in 2024, marking the highest import level in over two decades. This change follows severe weather and regional flooding in Brazil's key rice-producing region, Rio Grande do Sul, which has led to a substantial downward revision in the country's rice production for the 2023/24 season, now projected at 7.0 million tons, according to the USDA’s June ‘Grain: World Markets and Trade’ report.

In response to the anticipated shortfall, the Brazilian government has implemented a suspension of import tariffs on most rice varieties effective from May 21, 2024, through the end of the year. Additionally, Brazil has announced plans to import 1.0 million tons of rice by the end of 2024. On June 6, Brazil conducted its first rice auction under this new policy, successfully bidding for approximately 260,000 of the permitted 300,000 tons. The origin of this rice remains uncertain, but Brazil’s national supply company, CONAB, mandates that imported rice must be delivered by September 8 and sold in 5-kilogram packages at a maximum price of R$4 per kilogram (approximately $0.76 USD).

This move aims to stabilize rice supplies and control domestic prices. However, domestic rice producers have voiced concerns over the influx of additional rice supplies, particularly as the local harvest has only recently concluded. Traditionally, Brazil allows duty-free rice imports only from Mercosur member countries—Paraguay and Uruguay being the largest suppliers, with Argentina contributing smaller quantities. The current policy shift permits duty-free access to non-Mercosur suppliers as well, reminiscent of a similar measure in 2020 that led to increased imports from non-Mercosur countries, including over 82,000 tons of milled rice from the United States.

The changes in Brazil's import policy are expected to have a notable impact on the country's rice exports as well. Since 2022, Brazil has been exporting substantial quantities of rice, gaining market share in Latin America and expanding into African markets due to India’s export restrictions. However, the damaged crop has led to increased export prices for Brazilian rice in the 2023/24 season. As a result, markets that traditionally imported from Brazil might now turn to the United States, which has become the most competitively priced rice supplier in the Western Hemisphere.