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Prices of yellow maize and wheat followed mixed trends but remained generally high

12/03/2019

Prices of maize and wheat followed mixed trends in February but remained generally higher than a year earlier due to the reduced outputs in 2018 and costlier imports. In Argentina, domestic prices of yellow maize decreased in February on account of favourable prospects for the 2019 maize harvest, which has recently started in central growing areas. Similarly, in Uruguay, the good outlook for this year’s crop, about to be harvested, weighed on prices. Prices weakened also in Peru and Colombia. Despite the recent declines, however, prices in these countries remained above their year-earlier levels. Elsewhere in the subregion, prices of maize generally increased. In Brazil, where harvesting of the first season crop and planting of the second main season crop are ongoing, prices of yellow maize strengthened in February. Despite expectations of a good aggregate output this year, high freight costs and strong demand for exports underpinned prices and contributed to keep them above their year-earlier levels. Prices increased also in Bolivia (Plurinational State of) in the major producing Department of Santa Cruz, where reduced rainfall in February raised concern over the 2019 main season output and, together with a reduced 2018 output, kept prices higher year on year. Similarly, in Ecuador, prices of maize increased or remained relatively stable but were overall above their year-earlier levels due to the reduced crop last year. Regarding wheat, in Argentina, domestic prices of wheat grain weakened in February on account of a decline in demand for exports and the good recent harvest. Prices, however, were still more than double their year-earlier levels, after the sharp increases in 2018, which were triggered by a strong pace of exports, sustained by the country’s weak currency. In Brazil, prices of wheat grain strengthened in February and were more than 35 percent higher than a year earlier despite the above-average harvest completed in December 2018, mainly reflecting trends in the Argentinean export market, the country’s main wheat supplier. Similarly, in Bolivia (Plurinational State of), prices of wheat flour, mostly imported from Argentina, were more than 10 percent higher than their levels a year earlier despite some recent declines. In Uruguay, prices of wheat rose in February and were nearly 40 percent higher year on year, supported by a below-average 2018 crop. By contrast, in Chile, prices declined with the harvest nearing completion but were more than 20 percent above their levels in February last year due to costlier imports, which represent around half of the total supply. In importers, Colombia, Ecuador and Peru, prices of wheat flour remained relatively stable in February and were around or below their values the corresponding month last year on account of adequate domestic availabilities. With regard to rice, prices remained broadly stable across the subregion in February and around or below their year-earlier levels in most countries. In Brazil, prices of paddy rice changed little in spite of the recently started harvest, as an 11 percent year-on-year drop in output is anticipated due to a consecutive decline in plantings. Prices remained relatively stable also in Bolivia (Plurinational State of) and Colombia, while they weakened in Ecuador and Peru to levels well below those a year earlier, on account of the good harvests last year. By contrast, a reduced 2018 crop sustained the high levels of prices in Uruguay despite some recent weakening.