Chile

GIEWS Country Brief: Chile 14-July-2021

FOOD SECURITY SNAPSHOT

  1. Planting operations of 2021 wheat and oat crops underway

  2. Cereal import requirements in 2021/22 forecast at high levels

  3. Prices of maize and wheat higher year on year reflecting trends in international market

  4. Concerns on food security conditions of most vulnerable households

Planting operations of 2021 wheat and oat crops underway

Planting of the 2021 wheat and oat crops is ongoing in the key producing regions of Araucanía, Bío bío and Maule. The planted area with both crops is anticipated to be near average as the decreasing trend observed during the last five years, despite high production costs, was reversed due to rising prices of the grains. The strong export demand for processed oats also supported the expansion in plantings. Rainfall amounts are forecast at below‑average levels in the August‑October period, which coincides with crop germination and development, raising concerns on crop yields.

The 2021 maize crop was harvested between March and May and production is officially estimated at 630 000 tonnes, about 35 percent below the five‑year average. The low level of output mainly reflects the reduced planted area, which has been declining during the last ten years due to the low profitability of the maize crop. According to an analysis by the Ministry of Agriculture, the net profit per hectare of maize has been decreasing since 2015 and it prompted farmers to shift to more remunerable horticulture crops. In addition, below‑average rainfall amounts during the last quarter of 2020 affected crops at germinating and flowering stages in the main producing regions of O'Higgins and Maule, with negative consequences on yields.

Cereal import requirements in 2021/22 forecast at high levels

Cereal import requirements in the 2021/22 marketing year (April/March) are expected at high 4.1 million tonnes, reflecting the sustained local demand of maize for feed use and wheat for food and feed (salmon) use. Import needs have been exacerbated by the well below‑average domestic maize production in 2021.

Prices of maize and wheat higher year on year reflecting trends in international market

After weakening marginally in April and May, prices of yellow maize increased in June and were well above their year‑earlier levels in line with trends in the international market. Reduced domestic supplies from the lower year‑on‑year imports during the first five months of the year also exerted upward pressure on prices. Prices of wheat grain increased steadily between February and June 2021 following the rise in prices of imported grains.

Concerns on food security conditions of most vulnerable households

According to FAO's State of Food Security and Nutrition in the World (SOFI) 2021 , the prevalence of moderate or severe food insecurity in the total population increased from 10.8 percent in 2014‑2016 to 17.9 percent in 2018‑2020. The worsening of food security took place amid a sharp contraction in the Gross domestic product (GDP) by 6 percent in 2020 . Although the economy is forecast to rebound by 5 percent in 2021, concerns remain on the food security conditions of the most vulnerable households that are highly reliant on the informal economy.