09/30/2024 – 17:30
The National Supply Company (Conab) informed, in a note, that the R$998 million in extra credit made available to the company through Provisional Measure 1,260/2024 will be allocated to the launch of rice sales option contracts. The figure is intended for the formation of public stocks, according to the MP published in the Official Gazette of the Union.
According to Conab, based on the MP, the company is authorized to launch option mechanisms to purchase up to 500 thousand tons of rice. “The measure is yet another action within the resumption of public stocks in the country and aims to encourage grain production, as well as support farmers,” said the state-owned company.
Conab should disclose in the coming days the criteria that will be adopted in operations, such as prices and volumes to be offered at auctions. The government’s idea is to diversify and stimulate rice production in the country, amid the high concentration of crops in Rio Grande do Sul.
With option contracts signed with producers, in practice, the government will guarantee the producer the purchase price of the product with a profit margin. If at the time of the operation the market price is more remunerative, the producer has the option of not exercising the right to sell to the government (sale option) and negotiating the product on the market. In the opposite case (market prices below cost), the producer exercises the sale option to the government, which purchases the cereal for public stocks. The values of option contracts tend to be at an average price 10% above the minimum guarantee value (stipulated by the government for each crop and which covers production costs) and plus carrying cost, which would reach between 12% and 15%. % over the minimum, found the Broadcast Agro.
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