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South America

Prices of wheat and maize generally on the increase

11/03/2020

In several countries of the subregion, prices of wheat and maize rose in February and were above their values in the corresponding month last year. In Argentina, the main producer of the subregion, wholesale prices of wheat increased for the second consecutive month and were higher than in February last year due to sustained demand from exporters and from the domestic industry. Retail prices of wheat-derived products also continued to increase and were higher, year on year, amid high general inflation and strong wheat grain values. After a seasonal decline in January, in Uruguay and Chile, prices increased in February and were higher, year on year, supported by the depreciation of the currencies in both countries. In Brazil, a net importer of wheat, prices continued to rise and were higher than a year earlier due to higher export quotations from Argentina, a weaker currency and the reduced 2019 output. In other importing countries, prices held relatively stable in February and were below or around their year-earlier levels in Bolivia (Plurinational State of), Ecuador and Peru. Prices of imported wheat flour remained steady also in Colombia but were higher on a yearly basis, partly due to the depreciation of the country’s currency. Regarding yellow maize, in Argentina, prices weakened in February, pressured by the favourable 2020 production prospects, with reported good yields from early-harvested crops. By contrast, in Brazil, despite the ongoing first season harvest, prices generally increased, particularly in the key producing state of Rio Grande do Sul, where crop yields were adversely affected by hot and dry weather. In Bolivia (Plurinational State of), prices of maize increased further in February, with seasonal upward pressure exacerbated by excessive rainfall in early February that affected crops. This, together with a decline in maize production in 2019, kept prices above their year-earlier levels. Similarly, in Uruguay and Chile, prices of maize increased slightly in the past month in line with seasonal trends, while they declined in Colombia and Ecuador. With regard to rice, in Brazil, the subregion’s main producer, prices declined in February in the key producing state of Rio Grande do Sul following the start of the harvest. In Colombia, prices rose for the fourth consecutive month, with seasonal upward pressure recently exacerbated by concerns over the impact of high temperatures on crops in key producing areas. Prices were over 30 percent higher, year on year, mainly due to strong local demand and rising costs of basic inputs. Prices of rice were up from a year earlier also in Peru and Uruguay mostly as a result of reduced outputs in 2019.