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Increases in prices of rice eased in May, while prices of wheat continued to rise

10/06/2020

In most countries of the subregion, after the sharp increases in the past two months, prices of rice levelled off in May or increased but only moderately reflecting a slowdown in domestic buying and improved market availabilities from the new harvests. In Brazil, prices increased for the third consecutive month but at a slower rate than in the past two months. The upward pressure from still robust retail demand amid the COVID-19 pandemic and slow farmer selling was partly offset by the recent completion of the harvest. Demand for export, spurred by a weak currency, also provided support and contributed to keep prices more than 20 percent higher than a year earlier. In Colombia, after the sustained increases of the past several months, prices levelled off in May as a result of improved supplies from the ongoing harvest in the key producing departments of Tolima and Huila and a slowdown in domestic buying compared to the past few months. Similarly, in Peru, prices increased only slightly in May, with the new harvest contributing to ease the pressure. Prices were relatively stable in Uruguay in May, as the upward pressure from the large exports in the past months was offset by the good 2020 output recently gathered. Also in Ecuador, prices remained relatively stable. With regard to wheat, prices generally increased in May and were higher year on year. In Argentina, where planting of the 2020 crop has recently started and forecasts point to record sowings, prices of wheat grain continued to strengthen in line with historical seasonal trends and were well above those a year earlier mainly sustained by strong demand for export and a weak currency. In Uruguay, where planting of the new crop is also ongoing under favourable conditions, prices of wheat grain remained relatively stable for the second consecutive month on account of adequate domestic supplies and reduced exports in the current marketing year. Prices declined in Chile, after the increases in the past three months, reflecting larger imports in the March-April period compared to the corresponding period last year. However, prices remained more than 15 percent higher on a yearly basis due to a reduced 2019 output and a weaker currency. In net importer, Brazil, prices of wheat continued to increase in May and remained well above their year-earlier values due to tight domestic availabilities and a weak currency making imports costlier. In other importing countries, prices of wheat flour held steady in May and remained around or below their year-earlier levels in Ecuador and Peru. In Colombia, prices remained also relatively stable in May but were up from a year earlier, underpinned by the depreciation of the country’s currency. With regard to maize, prices of yellow maize declined for the fourth consecutive month in Argentina with the 2020 harvest virtually complete and officially estimated at a well above-average level. A strong pace of shipments and a weak currency, however, kept prices higher than their values a year earlier. Similarly, in Ecuador, prices of maize continued to decrease seasonally in most markets. In Chile, prices of yellow maize declined in May pressured by the new 2020 crop and larger imports during the first four months of the year. By contrast, prices of maize strengthened somewhat in Uruguay as the downward pressure from the recently-completed harvest was limited by some crop losses of the first season crops in areas affected by dry conditions. Prices remained more than 60 percent higher year on year mainly reflecting a weaker currency. In Brazil, after the sustained increases in the past months, prices of yellow maize decreased in May on reduced export sales and with the new main harvest recently started. The depreciation of the currency, however, continued to support prices, which were some 40 percent above those a year earlier.