Reference Date: 26-September-2023

Paddy production forecast at average level in 2023

Harvesting of the paddy crop takes place throughout the year, with nearly half of its output concentrated during the May to July period. Paddy production up to end‑July is officially estimated at 2.4 million tonnes, about 4 percent below the five‑year average. This reflects the adverse impact of torrential rainfalls between mid‑March and April in northern areas on standing crops, which more than offset the bumper harvest gathered in the first quarter of 2023. Due to conducive weather conditions since June, official estimates point to above‑average plantings of paddy crops that are being harvested between August and November. Prospects for crop yields are uncertain, on account of mixed weather forecasts. While above‑average precipitation amounts are forecast in the northwestern region during the October to December period, dry weather conditions are expected over most of the key producing rainforest (selva) region. Overall, paddy production in 2023 is preliminarily forecast at an average level.

Yellow maize for feed use is also harvested all year round. According to official estimates, production of the first seven months of the year is 834 000 tonnes, 10 percent above the five‑year average. This is due to above‑average planted area, which mainly reflects the sustained demand from the domestic feed industry, amid declining imports of maize in the 2023 January to July period.

Production of white maize for food use during the first seven months of 2023 is officially estimated at a near‑average level of 287 000 tonnes. This is result of the below‑average area sown, due to dry conditions during late 2022 in the key producing departments of Cusco, Apurimac and Huancavelica, offsetting by above‑average yields.

Cereal import requirements forecast at slightly below‑average level in 2023

Maize imports, which account for 60 percent of the total annual cereal imports, are anticipated to be below the average in 2023, reflecting a decrease in poultry production during the first half of the year. Wheat imports are expected to remain at average levels. Overall, cereal import requirements in the 2023 marketing year (January/December) are anticipated at a slightly below‑average level of 6 million tonnes.

Prices of yellow maize declined during first eight months of 2023

Wholesale prices of yellow maize decreased substantially between January and August 2023, reflecting downward trends in international markets and the above‑average domestic production in the first seven months of 2023. In August, maize prices were more than 20 percent lower than the high levels registered in the same month a year earlier.

Following declines in previous months, prices of rice rebounded in August on account of below‑average outputs gathered in June and July. In August, prices were 7 percent higher year‑on‑year.

Regarding wheat flour, after soaring between March and May 2022 following the breakout of the war in Ukraine, prices have been stable, but at high levels. The stability is a result of high processing and transport costs offsetting the recent declines in export prices in Canada and Argentina.

In general, food prices have been modestly decreasing in recent months. However, the annual food inflation rate in the Lima metropolitan area remains at high levels of 9.7 percent in August 2023, limiting access to food for the most vulnerable households.

Disclaimer: The designations employed and the presentation of material in this information product do not imply the expression of any opinion whatsoever on the part of FAO concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries.

This brief was prepared using the following data/tools:
FAO/GIEWS Country Cereal Balance Sheet (CCBS) https://www.fao.org/giews/data-tools/en/ .

FAO/GIEWS Food Price Monitoring and Analysis (FPMA) Tool https://fpma.fao.org/ .

FAO/GIEWS Earth Observation for Crop Monitoring https://www.fao.org/giews/earthobservation/ .

Integrated Food Security Phase Classification (IPC) https://www.ipcinfo.org/ .