Reference Date: 19-August-2022

Conditions of the 2022 main maize crop generally favourable

The 2022 main season maize crop is at flowering and grain-filling stages and will be harvested from September. Good seasonal rains between April and mid‑June bolstered initial prospects for yields, which were slightly curbed by reduced precipitation in July. Although there is no official estimate on planted area of the main season crops, the association of small and medium producers estimated sowings had declined year on year, on accounts of high costs of agricultural inputs. To contain negative effects of rising production costs, the government distributed certified maize seeds and fertilizers to 600 000 farmers. In addition, in June 2022 the National Assembly approved a new temporary function of the government-affiliated National Centre for Agricultural and Forestry Technology (CENTA) to guarantee availability of agricultural inputs, applicable until the end of 2023. CENTA will directly purchase fertilizers and sell to farmers at a discounted price, and the first purchase of 10 000 tonnes of fertilizers is planned.

According to satellite imagery, as of early August, conditions of the main maize crop are generally favourable (see green areas in VHI map) except some localized areas in the western part of the country. Weather forecasts point to the above‑average precipitation in the August‑October period and an active hurricane season, which lasts until November. If torrential rains materialize at the crop maturation or harvest period, it is likely to affect yields. However, abundant precipitation in August could favour land preparation of the 2022 minor season crops.

Cereal import requirements in 2022/23 anticipated at slightly above‑average levels driven by strong demand

Cereal import requirements in the 2022/23 marketing year (September/August) are forecast at slightly above‑average levels, reflecting the strong demand for wheat for human consumption and maize by the feed industry. However, elevated international prices of cereals could constrain the domestic demand.

Prices of white maize and red beans well above their levels a year earlier in July

Prices of white maize, which have been strengthening since early 2021, continued to rise at a sharper rate in 2022 due to rapid increases in production costs, including fertilizers and fuel. As of July 2022, prices were more than 70 percent higher year on year. Similarly, prices of red beans also rose during the first seven months of 2022 and were 65 percent above their year‑earlier levels. Rice prices, after being held steady in 2021, increased in the second quarter of 2022. High export quotations in the country’s key suppliers of beans (Nicaragua) and rice (the United States of America) exerted additional pressure on prices in domestic markets.

High international prices of food and fertilizers are likely to affect food insecurity levels

Fertilizer supply mostly originates from China and the Russian Federation. Imports between January and June 2022 were nearly 25 percent lower compared to the same period in the previous three years. The reduced imports mainly reflect high prices of fertilizers and restricted export availability from the key producing countries. The association of producers has promoted the use of organic fertilizers to lower dependency on mineral fertilizers. If imports of fertilizers remain at a low level for the remainder of 2022, its reduced application could constrain attainable yields.

Food prices have generally increased since August 2021, with the annual food inflation rate estimated at 14.2 percent in July 2022 , up from 0 percent in the same month last year. Amid increasing food prices, the government eliminated tariffs on imports of 20 basic food items, including rice, sugar, beans, maize and wheat flour/grains, tomatoes, onions, cooking oil as well as fertilizers, from March 2022 for a period of one year. High levels of staple food are highly likely to diminish the purchasing power of vulnerable households and constrain their access to food, with negative effects on food security.

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