Chile

GIEWS Country Brief: Chile 10-August-2020

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FOOD SECURITY SNAPSHOT

  • Maize production in 2020 estimated well below average due to low plantings and yields

  • Planting of 2020 wheat and oat crops recently completed

  • Cereal import requirements in 2020/21 forecast to remain well above-average levels

  • Wheat and maize prices declined since May but higher year on year

Maize production in 2020 estimated well below average due to low plantings and yields

Harvesting of the 2020 maize crop was completed in May and production is estimated at 750 000 tonnes, more than 30 percent lower than the previous five-year average. The reduced output mainly reflects the lowest planted area over a decade as a result of the reducing profitability of farmers. Based on analysis of the Ministry of Agriculture, the net profit per hectare of maize has been decreasing since 2015, which induced farmers to opt for horticulture crops that are more profitable. In addition, planting operations were hampered by limited precipitation amounts in September-October. Below-average rainfall amounts continued across the cropping season, which significantly affected crop yields in the main producing regions of O’Higgins and Maule.

Planting of 2020 wheat and oat crops recently completed

Planting operations of the 2020 wheat and oat crops have recently completed under favourable weather conditions as rains improved in June replenishing soil moisture. According to an association of producers, an annual increase in profits received by farmers has instigated an increase in plantings in 2020.
However, the planted area is expected to remain at a below-average level following the low domestic price levels between 2016 and 2018. Weather forecasts point to a high likelihood of below-average rainfall amounts in key producing regions of Araucanía, Bío Bío and Maule in the August-October period, which could diminish yield prospects.

Cereal import requirements in 2020/21 forecast to remain well above-average levels

Cereal import requirements in the 2020/21 marketing year (April/March) are forecast to increase for the fifth consecutive year and remain at the high levels of 4 million tonnes. The high import needs mainly reflect the sustained local demand of maize for feed use and wheat for food and feed (salmon) use.

Wheat and maize prices declined since May but were higher year on year

After reaching a peak in April 2020, wholesale prices of maize and wheat grain decreased for the third consecutive month in July. Both prices were about 10 percent higher year on year, mainly due to the increased domestic demand and a sharp depreciation of the local currency amid the COVID-19 pandemic.