Peru Agriculture Profile 2012

Reference Date: 27-May-2011

Decrease in rice production forecast for 2011

Harvesting of the main 2011 cereal crops continues under generally dry weather conditions. Initial estimates indicate lower rice production for 2011 as a result of a 15 percent reduction in the area sown. The sowing season was delayed in the northern coast and in the Selva Alta, the country's largest producing areas (constituting 85 percent of national production), due to insufficient rainfall and cold winds. This will affect production which is officially forecast at around 2.4 million tonnes (paddy rice), 15 percent less than the favourable amount last year and below the average for the last five years.

In addition, the main yellow maize crops, mainly irrigated, are being harvested. Production obtained in the first quarter of this year is lower than the one obtained in the same period last year and provisional estimates indicate a lower annual production than in 2010 as a result of the lack of water in the largest producing areas of the north coast. Wheat, white maize and barley crops are being harvested in La Sierra. A decrease in production is forecast due to insufficient rainfall throughout the agricultural season.

Maize imports continue to increase

Despite an increase in production in 2010, imports of yellow maize in the 2011 (January/December) marketing year should reach around 1.7 million tonnes, 13 percent more than in 2010. The increase in imports follows the expansion of the poultry industry sustained by the economic growth and consequent increases in internal consumption. The country imports over 50 percent of the maize it consumes and almost all of the wheat it consumes. Imports of wheat during the 2011 marketing year are expected to increase by 12 percent up to around 1.7 million tonnes, reflecting increased demand.

Cereal prices increase

Prices of rice, that began increasing in November 2010, were almost 20 percent higher in April 2011 than they were last year. The increasing trend is due to reduced production in 2010 and unfavourable outlook for the 2011 output. Prices of yellow maize and wheat flour have been increasing since August 2010, reflecting the trends on the international cereal markets; in April 2011 they were 17 percent higher than in April 2010. However, prices of potatoes, another basic product in the national diet that had reached record levels in September 2010, have been falling since October with the 2010 harvest. In April 2011, prices of white potatoes were 9 percent higher than in April 2010.

08/12/2010  A slight fall in 2010 cereals output from 2009’s record levels
The 2010 cereals harvest is almost completed, with provisional output estimates of around 4.8 million tonnes, 3 percent below last year’s 5 million tonne record harvest. Harvests of the main rice crops (unhulled) and maize (yellow and white) are put at 2.9 and 1.40 million tonnes, respectively, or 3 and 5 percent below 2009’s all-time highs. The lower output is due to reduced sowing (-5 percent) and lower rice yields due to the exceptionally low temperatures during the season, which affected crop growth in the panicle initiation phase and at the beginning of the maturity phase.

Cold weather during the 2009/10 season also caused serious localized crop and livestock losses in the ‘sierra sur’ provinces due to freezing weather conditions and hailstorms.

Increased sown acreages in the 2010/11 agricultural season
Sowing for the main 2010/11 season has begun in the sierra region. After October’s below-normal rainfall levels, poor soil moisture was reported in October, and more rain is still needed.

It is planned to increase acreages under the 7 main foodcrops (yellow maize, white maize, rice, wheat, barley, potato and cassava) during the 2009-10 season, except for rice, which for acreages will fall by 3.4 percent. Most sowing intentions are generally based on higher producer prices, the demand for cereals for the regional food assistance programme and, in the case of maize, a stronger demand for yellow durum maize, of which there will be a 5.5 percent increase in sowing, and a higher demand for balanced animal feed.

Imported maize requirements continue to rise
Despite 2009’s record maize output and good production levels in 2010, the country still needs to import about 54 percent of its consumption requirements. In the 2010 commercial season (January/December) maize imports are expected to be quite high at 1.5 million tonnes, 11 percent over last year. Import requirements are being driven by the expanding poultry industry which accounts for the bulk of imported yellow maize driven by economic growth and the people’s more diversified consumption patterns.

Most wheat is imported, and the imports are expected to continue growing in tandem with population growth to reach about 1.6 million tonnes in 2010.

The southern sierra Departments affected by a cold spell
Despite a high cereals harvest in 2010 nationwide, the cold spell that hit the country this year from May onwards reduced output, and caused livestock losses in the southern sierra Provinces. Up to 25 percent of the livestock has reportedly been lost in the stricken Provinces. On 24 June the Peruvian government declared a state of emergency in 16 of the 24 Departments and through the local Civil Defence and the National Food Assistance Programme (PRONAA) it is continuing to provide humanitarian assistance to the affected population, above all in the form of food aid.

Rising wheat and maize prices
Wholesale prices of wheat and maize flour began rising in August 2010 in the wake of international price hikes. October 2010 wheat flour prices were 8 percent above July prices, at around PEN 1 741/tonne. Maize prices also rose by about 10 percent above July levels to reach PEN 1 180/tonnes in October.

Potato prices began rising in May this year and reached a record level of PEN 1 080/tonne in September before falling by 4 percent in October to PEN 1 040/tonne.