Brazil rice sector urges govt to end export ban

SAO PAULO/PORTO ALEGRE (Reuters) - The Brazilian government should lift its rice export restrictions before it sets a bad precedent and darkens the entire investment climate for the agricultural sector, producers and exporters said on Thursday.

Brazil's massive farm sector has been a stalwart performer in the economy for nearly the past decade. Farm sector exports alone boast a net trade surplus that is roughly equal to Brazil's total trade surplus.

But the government announced on Wednesday night that it would temporarily ban rice exports from government stockpiles to safeguard domestic supply and contain any pressure on food prices.

Brazil is not the first to attempt to apply such methods to manage food inflation.

Argentina has been shutting down many of its food export industries to contain local prices over the past months. India and Vietnam, the world's second and third largest rice exporters in 2007, have also imposed export restrictions, as world prices skyrocket on tight supplies.

Historically such attempts have failed miserably.

Brazilian Agriculture Minister Reinhold Stephanes plans to meet with rice producers in an attempt to strike a deal to limit exports of the grain, but analysts say it is unlikely to achieve much.

"The (private sector) ban won't happen. It would be a war," the commercial director of Rio Grande do Sul state's Rice Institute (Irga), Rubens Silveira, said.

Brazil should harvest an 11.9 million ton rice crop, up from 11.3 million last season. Harvesting is 80 percent completed.