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Country Briefs

  Chile

Reference Date: 08-June-2022

FOOD SECURITY SNAPSHOT

  1. Planting of 2022 wheat and oat crops ongoing

  2. Cereal import requirements in 2022/23 forecast at high levels

  3. Wholesale prices of wheat and maize at record high levels in May 2022

  4. High international prices of cereals and fertilizers contribute to rising inflation and affect food security

Planting of 2022 wheat and oat crops ongoing

Harvesting of the 2022 maize crop is nearing completion and a record low production is expected, due to the low level of plantings. The planted area has been declining for the past ten years on account of the low profitability of the maize crop and it was officially estimated at an historic low level of 55 000 hectares. Although the initial planting intention survey pointed to larger sowings (70 000 hectares), belowaverage precipitation amounts in the last quarter of 2021 in the key producing regions of O’Higgins and Maule, constrained the extent of plantings. Persistent dry weather conditions during the first three months of 2022 affected crops, reducing yields.

Planting operations of the 2022 wheat and oat crops are ongoing under generally favourable weather conditions. Despite the high domestic prices of the crops, an expansion of sowings is unlikely as a consequence of elevated production costs. The planted area with the 2022 wheat crop is forecast to remain at belowaverage levels as in 2021. The area sown with oats increased between 2019 and 2021 due to an increasing export demand for processed products and in 2022 is anticipated to remain at aboveaverage levels. Official weather forecasts point to belowaverage precipitations during the JuneAugust period, with negative consequences on crop germination and development.

Cereal import requirements in 2022/23 forecast at high levels

Cereal import requirements in the 2022/23 marketing year (April/March) are expected at an high level of 4.1 million tonnes, reflecting the sustained local demand of maize for feed use and wheat for food and feed (salmon) use. The expected product shortfalls of the 2022 maize crop are likely to exacerbate the import needs.

Wholesale prices of wheat and maize at record high levels in May 2022

Wholesale prices of wheat have been on the rise since the beginning of 2021 following the high prices of grains imported from Argentina, Canada and the United States of America. The surge in international prices after the breakout of the conflict in Ukraine has accentuated the price gains in domestic markets, where prices in May 2022 were about 90 percent higher year on year, corresponding to record highs. Elevated transportation and production costs added upward pressure on prices. The high level of wheat grain prices contributed to increases in bread prices, which were 25 percent above yearearlier levels.

Prices of yellow maize were also at record high levels in May, supported by the high export prices of Argentina, the country’s main maize supplier.

High international prices of cereals and fertilizers contribute to rising inflation and affect food security

In the 20192021 period, the country imported fertilizers mainly from China (mainland), Malaysia, the United States of America and the Russian Federation. Imports of fertilizers during the first quarter of 2022 have declined by more than 50 percent compared to the previous three‑year average, as a result of the temporary export ban or quota introduced by China (mainland) and the Russian Federation. A decline in imports is likely to constrain domestic market supplies, with negative consequences on yields, production of current crops and farmers’ income.

As the country is highly dependent on imports to cover its consumption needs of wheat and maize, high international cereal prices have been exerting upward pressure on prices in domestic markets since the start of the conflict in Ukraine. In addition, the depreciation of the Chilean peso, which lost about 15 percent of its value against the US dollar between April 2021 and April 2022, made imports costlier, further increasing inflation. According to official sources, the annual inflation rate of food items was estimated at 16 percent in April 2022. High food prices are likely to erode the purchasing power of vulnerable households, limiting their access to food.

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