Peru

GIEWS Country Brief: Peru 03-June-2020

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FOOD SECURITY SNAPSHOT

Cereal production forecast at average level in 2020

Cereal import requirements continue to increase in 2020

Prices of rice sharply increased in March‑April period and higher year on year

Cereal production forecast at average level in 2020

Harvesting of rice crop takes place all year around and the bulk of the 2020 crop is currently being harvested under favourable dry weather conditions. Planted area of the first semester crops is officially estimated at an average level due to stable prices at the planting time between September 2019 and February 2020. Rainfall amounts in the June‑August period are forecast at a near‑average level and these rains are expected to replenish soil moisture and support germination and development of the minor season crop. The 2020 paddy production is preliminarily forecast to at average level of 3.2 million tonnes.

The harvest of white maize is ongoing, while the main season yellow maize crop is about to be harvested in June. The 2020 maize production prospects point to an average level, mainly reflecting stable prices of the crops.

Cereal import requirements continue to increase in 2020

Cereal imports in the 2020 marketing year (January/December) are forecast at 6.4 million tonnes, similar to last year’s record levels. Maize imports, which account for 60 percent of the total cereal imports, have been on the rise during the past ten years due to the strong demand of yellow maize for feed by the poultry sector. With the highest per capita consumption of chicken meat in Latin America, the poultry sector has been growing steadily in the country during the last two decades. Wheat imports, which explains more than 30 percent of the total cereal imports, are estimated at slightly above‑average levels, mainly reflecting stronger demand for human consumption, in line with an increasing population.

Prices of rice sharply increased in March‑April period and higher year on year

Wholesale prices of rice increased by more than 10 percent in April, following a sharp increase in March, due to hoarding and logistic disruptions amid the COVID‑19 pandemic. The increase was further exacerbated by reduced market availabilities, prompted by increased exports and public purchases. In April, prices of rice were more than 35 percent higher year on year.

Prices of yellow maize increased sharply in April mainly due to a decline in imports in the first quarter of 2020 compared to the same period in 2019. Prices of wheat flour have been stable throughout the year, reflecting adequate imports.

COVID‑19 and measures adopted by the Government

A Supreme Decree was issued on 16 March 2020 enforcing quarantine measures until 30 June 2020 in order to contain the spread of the COVID‑19 outbreak. All productive and commercial activities along the food supply chain remain operative, including cross‑border trade.

The Ministry of Agriculture has established a fund worth PEN 600 million (equivalent to USD 175 million at the exchange rate as of 27 May 2020) to support smallholder farmers that have been affected by the COVID‑19 pandemic and boost domestic food production. In addition, the Agricultural Bank is deferring payments of loans that are due from 14 February to 30 June 2020 up to six months , without charging the interest rate. In order to increase market the availabilities of agricultural products and stabilize prices, the Ministry of Agriculture extended direct sale outlets of farmers (called Mercados Itinerantes) until June 2020. The Government also increased social spending by granting a single delivery subsidy worth PEN 760 (about USD 220) to 1 million vulnerable rural households.

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