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Prices of rice declined further in June, while those of wheat generally increased

14/07/2020

In most countries of the subregion, prices of rice continued to decline in June, reflecting improved supplies from the 2020 harvests and a further slowdown in domestic buying. However, prices remained overall higher than a year earlier after the upsurge in the past months amid the COVID-19 pandemic. The notable exception was Brazil, where prices reached multi-year highs after increasing for the fourth consecutive month in June. Large exports in the past month provided upward pressure on domestic prices and more than offset a decline in the domestic demand compared to the March-May period. In Colombia, prices declined in most markets pressured by the improved supplies from the ongoing main harvest and a decline in demand. However, prices remained some 40 percent higher than a year earlier after the sustained increases in the past few months, which were due to an upsurge in demand and a weaker currency. Prices weakened also in Uruguay, as a result of the recently gathered 2020 crop, coupled with a slight appreciation of the currency in June. Prices remained more than 10 percent higher year on year mainly due to large exports in the past months. In Peru, prices declined sharply in June, reflecting improved market availabilities from the new harvest and larger imports in the second quarter of 2020. Prices remained some 30 percent higher year on year after the sustained increases in the past three months, underpinned by stronger domestic and foreign demand. Prices of rice weakened also in Ecuador. With regard to wheat, prices generally increased in June, in line with seasonal trends and were higher year on year. In Argentina, where planting of the 2020 crop is ongoing, prices of wheat grain continued to strengthen seasonally and were well above those a year earlier mainly sustained by strong demand for export spurred by the strong depreciation of the currency in the past year. In Uruguay, prices of wheat increased seasonally in June, with the 2020 wheat crop at the developing stage. By contrast, prices declined for the second consecutive month in Chile, following trends in the Argentinean wheat export market, key supplier, and currency movements. However, prices remained some 10 percent higher on a yearly basis mainly due to the depreciation of the country’s currency, that despite a recent appreciation, lost some 15 percent of its value against the United States dollar compared to June last year. In net importer, Brazil, prices of wheat continued to increase due to tight domestic availabilities. Prices remained well above their year-earlier values, mainly supported by the country’s weak currency, which lost 35 percent of its value against the United States dollar over the past year. In Ecuador and Peru, other importing countries, prices of wheat flour remained stable in June and around or below their values a year earlier. In Colombia, prices held also steady but were higher than their year-earlier values, reflecting the depreciation of the currency. With regard to maize, after the sustained seasonal declines in the past months, prices of yellow maize in Argentina increased in June, on account of large export sales. Despite official estimates pointing to a well above-average output, a strong pace of shipments and a weak currency kept prices higher year on year. By contrast, in Brazil, prices of yellow maize declined for the second consecutive month on low export sales coupled with the ongoing main harvest. Similarly, in Peru, prices of yellow maize declined further in June and were down from a year earlier. In Ecuador, prices of maize also decreased with the 2020 main season harvest and lower demand from the feed industry. In Chile, prices of yellow maize remained virtually unchanged in June, with large imports in the January-May period, mainly from Argentina, offsetting the upward pressure from the reduced 2020 output.