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Operation Involves Sale Option Contracts (COV) and Functions as a Price Insurance, Ensuring the Marketing of 200 Thousand Tons of the 2025/2026 Harvest.
The National Supply Company (Conab) announced on Monday (1) the allocation of R$ 300 million to support rice producers. The announcement, made in Rio Grande do Sul, aims to strengthen the sector through Sale Option Contracts (COV). This is an important step in investments in national rice.
What Are Sale Option Contracts (COV)?
The announced resources will guarantee contracts for approximately 200 thousand tons of the 2025/2026 harvest. The measure seeks to directly support producers. The Rio Grande do Sul, the largest rice producer in Brazil, is the focus of the initiative. According to the president of the state-owned company, Edegar Pretto, the action is “the helping hand of the federal government signaling, even before sowing, the option to sell at a price that makes cultivation economically viable”.
A Price Insurance for Rural Producers
The COV acts as a price insurance for producers. Those who purchase the contracts guarantee the right, but not the obligation, to sell the rice to the government. The sale price is fixed in advance, which stimulates production. If the market offers a more advantageous price at the time of sale, the farmer can negotiate their product with other buyers, without additional costs.
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Continuous Support: Third Round of Investments in the Sector
This is the third round of COV launched by Conab in less than a year. The action demonstrates continuous support for the sector. At the end of last year, about 91.7 thousand tons of rice were traded in the first round. In June of this year, a second operation negotiated contracts for nearly 110 thousand tons, with prices signaled by the government around R$ 74.
The Importance of Public Stocks for the Consumer
The government’s purchase of rice through these contracts forms public stocks. These stocks are strategic for the country. They can be used in crisis situations, helping to avoid sharp price fluctuations and ensuring supply for consumers. The details of the new operation, such as prices and dates, will still be defined and published by the federal government.
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