Reference Date: 25-July-2022

First 2022 maize and paddy crops growing under favourable conditions

The 2022 main season maize crop is currently at vegetative and flowering stages and production is officially forecast at a near‑average level. Plantings increased to average from the low 2020 and 2021 levels, when farmers preferred to plant red beans for export. The expansion of planted area in the 2022 main season mainly reflects favourable soil moisture levels at planting time and higher year‑on‑year prices of maize, more than offsetting the elevated production costs. In March 2022, the Ministry of Economy announced the plan to distribute 155 000 packages of free agricultural inputs to producers of poultry, fish, coffee, beans, rice and maize in 2022. Crop conditions are generally favourable (see green areas in the ASI map), supported by abundant rains since end‑April. The passage of a tropical storm in early July brought heavy rains especially in the eastern region and, according to official sources, it did not affect agricultural production. Weather forecasts point to above‑average rainfall amounts in August and September. In case of torrential rains during crop maturation stage or harvesting operations, the excessive moisture could restrain yield potential.

The 2022 rainfed rice crop is at early vegetative stage in the key producing eastern areas and northern highlands, while the irrigated rice crop is currently being planted in the central region. Aggregate paddy production is officially forecast at an above‑average level of 432 000 tonnes, reflecting an increased use of high yield varieties and an expansion of area sown, owing to favourable weather conditions.

Cereal import requirements forecast at high levels in 2022/23 marketing year

Cereal import requirements in the 2022/23 marketing year (September/August) are forecast at an above‑average level of 915 000 tonnes, reflecting the sustained demand for wheat‑based products as well as for yellow maize by the local feed industry. Imports are expected to remain similar to the previous marketing year despite the increasing demand, due to expectations of good domestic cereal production in 2022.

Prices of staple crops well above year‑earlier levels in June

Wholesale prices of white maize and rice had a sustained rising trend during the first half of the year and, as of June, they were 30 and 17 percent, respectively, higher year on year. Prices of red beans rose sharply in May and June and were 40 percent up from June 2021. The high level of prices of staple crops reflects the elevated production and transport costs, and the fixing of fuel prices since end‑April has had a limited impact on containing the increase of food prices. Overall, prices of most food items were higher compared to a year earlier and the official annual inflation rate of food and non‑alcoholic beverages was estimated at 15.5 percent in June.

High international prices of fertilizers and wheat expected to have negative impact on domestic food security

Between January and May, fertilizer imports declined compared to the previous year due to export restrictions imposed by the Russian Federation and China (mainland), the country’s main fertilizers suppliers. The reduced fertilizer imports are likely to have a negative impact on the 2022 second and third seasons. In addition, as of June, international prices of fertilizers were higher year on year, likely reducing their affordability for farmers with negative consequences on future yields.

The country relies on imports to cover its domestic wheat requirements and, in the 2017‑2021 period, about 65 percent of the wheat and wheat flour were imported from the Russian Federation. A fivefold increase of wheat imports from the United States of America during the first five months of 2022 compensated the reduced imports from the Russian Federation in 2022. The current high international prices of wheat are likely to limit the access to wheat‑based products in domestic markets and result in increased demand for other cereals, adding upward pressure on prices of maize and rice.

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