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Prices of rice and wheat continued to increase in April, while those of maize declined seasonally

12/05/2020

In most countries of the subregion, prices of rice continued to increase sharply in April due to strong domestic demand amid the COVID-19 pandemic and reached multi-year highs. In Brazil, prices rose for the second consecutive month despite the recent completion of the harvest, due to slow farmer selling and strong retail demand. Similarly, higher domestic demand further underpinned the price increases in Colombia despite sufficient domestic availabilities. In Peru, significant price increases of rice were also recorded for the second consecutive month in April, with the bulk of the new harvest to be gathered in the next few months. After a sharp increase in March, in Uruguay, prices of rice levelled off in April pressured by the favourable production prospects of the 2020 crop, currently being harvested. Similarly, in Ecuador, prices of rice held steady in April. With regard to wheat, prices generally rose in April and were higher year on year. In Argentina, prices of wheat grain continued to increase in line with historical trends, with planting of the new crop soon to start, and were well above those a year earlier mainly as a result of large export sales during the season. In Chile, prices of wheat also rose and were more than 15 percent higher on a yearly basis due to a reduced 2019 output and lower imports in the first quarter of 2020 compared to the corresponding period last year. The significant depreciation of the country’s currency contributed to keep prices at levels well above those a year earlier. In net importer, Brazil, prices of wheat continued to increase in April and reached levels well above those of last year, with tight domestic supplies and a weak currency making imports not viable. In other importing countries, prices held relatively stable in April and were below their year-earlier levels in Peru and Ecuador, while in Colombia, prices of wheat flour increased in April amid stronger domestic demand and were up from a year earlier, sustained by the strong depreciation of the country’s currency. With regard to maize, prices of yellow maize declined for the third consecutive month in Argentina with the progress of the 2020 harvest, officially forecast at a well above-average level. Strong demand for export, however, kept prices higher than their values a year earlier. Similarly, in Ecuador, prices of maize declined in most markets with the ongoing harvest. In Uruguay, prices of maize also declined seasonally in April but remained more than 65 percent above those a year earlier due to a weaker currency and an anticipated decline in the 2020 output, affected by dry conditions. By contrast, in Brazil, prices of yellow maize in April averaged higher than in March, although they showed signs of a decline in the second half of the month reflecting reduced domestic demand and lower export sales. The strong depreciation of the currency, however, continued to support prices, which reached levels some 40 percent higher year on year. In Chile, prices of yellow maize rose further despite higher imports in the first quarter of the year and were above their year-earlier values on account of a weaker currency and forecast of a reduced output for the second consecutive year. Prices increased significantly also in Peru, mainly due to a decline in imports, principally from Argentina, in the first four months of 2020 compared to the corresponding period last year.

National policy responses to limit the impact of COVID-19 on food markets - update

Argentina, on 17 April 2020, extended price ceilings on basic food items introduced on 20 March for an additional period of 30 days, until 20 May.

Bolivia (Plurinational State of), on 13 April 2020, suspended import tariffs on wheat for a period of two years.

Colombia, on 9 April 2020, set duty-free imports for maize, sorghum and soybeans until 30 June 2020 (FPMA Food Policies).