Brazil annuls rice auction amid doubts over winners' financial capability
Adds official leaving his post in paragraph 7, Lula's role in the decision to annul the auction in paragraph 8
SAO PAULO, June 11 (Reuters) -Brazil's national crop agency Conab has decided to annul a recent rice auction as the government had doubts about the winners' financial capability to honor their commitments, the agency's head Edegar Pretto said on Tuesday.
Brazil last week had purchased 263,370 metric tons of imported rice for 1.32 billion reais ($246.45 million) in a rare auction to prevent a price hike after historic floods in the top producing state of Rio Grande do Sul.
The auction, however, raised questions in the market, as the main winners were companies with no known experience in rice.
"After the winners were announced, questions emerged about whether the companies had the technical and financial ability to honor the commitments of such a significant amount of public resources," Pretto told journalists in Brasilia.
"With all the information we gathered, we've decided to annul the auction".
Pretto added the government intends to hold a new auction with a new structure, although he did not provide a timeline.
Agriculture minister Carlos Favaro also said the ministry's secretary of agriculture policy has offered his resignation, which was accepted by the government.
Brazil's President Luiz Inacio Lula da Silva has taken part in the decision to annul the auction, according to the minister of agrarian development and family farming, Paulo Teixeira.
($1 = 5.3561 reais)
Reporting by Roberto Samora and Andre Romani in Sao Paulo and Lisandra Paraguassu in Brasilia; Editing by Gabriel Araujo and Aurora Ellis
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
