Production:

The Dominican Republic does not produce wheat; the country is completely dependent on imports to supply the domestic market.

Consumption:

The Dominican Republic continues to have one of the highest per capita wheat and wheat products consumption rates in the Latin America and Caribbean Region: approximately 90 pounds per year. The apparent consumption (Total Supply, less formal exports and ending stocks) rate has averaged approximately 404,000 MT over the last five Calendar Years (CY), with an average annual growth of 1.65%. Nonetheless, the substantial fluctuation in the amount of wheat processed for the domestic market is a strong indicator that large volumes of unofficial exports are likely flowing across the border into Haiti, in addition to officially-registered exports.

Wheat and wheat products consumption in the Dominican Republic, CY 2009-2014 (MT)

Year

Imports

Production

Exports

Apparent consumption

2010

581,607

0

152,894

432,041

2011

576,823

0

188,718

393,465

2012

555,526

0

129,760

430,241

2013

479,338

0

142,951

337,292

2014

573,969

0

142,927

431,042

*HS classification codes included: 1001, 1101, 190219, 190230, 190240, using a conversion factor of 1.368 for wheat flour (1101), pasta and couscous (190219, 190230 and 190240).

Sources: GTA, National Statistics Office of the Dominican Republic (ONE), National Directorate of Customs (DGA) GATS/USDA.

Based on these factors and input from industry contacts, Post forecasts MY 2015/16 Dominican wheat consumption of 390,000 MT. That would represent no change from projected 2014/15 consumption levels.

The country is home to a large milling industry and imports almost all of its wheat from the United States. Currently, the DR boasts a daily milling capacity of around 3,320 MT with an average utilization of 70%, divided among six different processors:

Mills currently operating in the Dominican Republic

Molinos Modernos*

Molinos Valle del Cibao

(Grupo Bocel)

Grupo J. Rafael Núñez

COOPROHARINA

Molinos del Higuamo

César Iglesias

* Also owns Molinos del Caribe.

Molinos Modernos (45%) and Molinos Valle del Cibao (34%) process nearly 80% of all wheat grain imports.

Generally, the wheat flour produced is used for bread-making, crackers, cookies, cakes, pastries, and pasta. According to trade estimates, more than half of the wheat flour available in the DR is used to make a popular type of bread known as pan de agua. This item is consumed regularly by a broad spectrum of the population, but is more heavily consumed in urban areas. The product is typically produced by industrial bakers, along with small and medium-sized bakeries and subsequently distributed to a variety of supermarkets, "mom-and-pop" stores, markets and/or other bakeries.

In addition, wheat flour is also used for many of the products distributed in the Dominican Government's feeding program. Bread, cookies and muffins are included in the meals that reach approximately 1.5 million school children in public schools throughout the country.

It is also worth noting that the demand for wheat flour has increased in recent years due to the growth in the HRI sector and tourism. Hotels consume large amounts of flour to make breads, cakes, pastries and other wheat-based products for four million visitors to the DR annually.

While the majority of flour production is destined for the domestic market, the DR also exports considerable quantities of wheat flour and other finished products (e.g., crackers, pasta) to neighboring Haiti. To a lesser extent, the DR has increased its exports of wheat products to Venezuela, Puerto Rico, the United States and other markets throughout the region.

Overall, millers' storage capacity is limited, but varies considerably by processor. Among the six mills operating in the country, collective storage capacity is estimated to be around 155,400 MT.

Trade:

During MY 2015/16, Post forecasts total wheat imports of 520,000 MT, a slight increase from projected 2014/15 imports of 515,000 MT, which represent an increase over the 508,177 MT imported during MY 2013/14. Even though milling capacity in Haiti has increased, Dominican exports of wheat flour and wheat products to Haiti (both official and unrecorded) remain strong.

The earthquake that struck Haiti in January 2010 had a direct impact on the export growth for wheat and wheat products from Dominican Republic. The only mill in Haiti at that time, Les Moulins d'Haiti (LMH), was destroyed and Dominican mills immediately increased output to supply the neighboring market. Haiti's annual wheat imports prior to the earthquake totaled approximately 200,000 MT, with the U.S. enjoying around 80% market share. The Dominican milling industry augmented its output between 40-50% (approximately 200,000 MT) in 2010 as a direct consequence of unmet demand in Haiti.

In December 2011, the LMH reopened. Additionally, since 2012 two other mills have started operating. However, neither one of the Haitian mills is working at full capacity. Therefore the DR continues to supply the Haitian market with substantial amounts of wheat flour. For MY 2015/16 and MY 2014/15, Post forecasts exports of wheat flour from the DR to Haiti trough formal trade channels at around 120,000 MT; similar to the 132,000 MT exported during MY 2013/14. Dominican millers recognize that over time, they will have more difficulty competing once the Haitian mills are operating at full capacity. However, they are confident in their ability to compete in that market, since it's a very price sensitive one.

Post projects imports of US wheat to the Dominican Republic at 440,000 MT during MY 2014/15 (approximate 97% market share). This will represent an 11% decrease from MY 2013/14 when the Dominican Republic imported all of his wheat grain from the US (494,754 MT). The projected decrease is mainly due to increased competition from Canadian wheat imports.

On average from 2010 to 2014, the DR imported approximately 96% of its wheat (HS 1001) from the United States. Smaller amounts were supplied by Canada (an average of 3% during the same time period), along with Germany and France.

Dominican Republic Wheat Grain Imports by Partner, MY 2010-2014 (MT)

Country

Years

2009/2010

2010/2011

2011/2012

2012/2013

2013/2014

United States

433,700#

533,326

548,341

491,488

494,754

Germany

0

0

0

0

0

Guatemala

0

0

0

81

0

Canada

10,435

16,600

9,001

12,400

0

France

8,000

0

0

0

0

Total

452,135

549,926

557,342

503,969

494,754

*HS heading 1001

#Includes 25,000 MT of monetized wheat.

Source: GTA, GATS/USDA

Currently, the majority of Dominican wheat imports are comprised of Hard Red Winter (HRW), Hard Red Spring (HRS) and Soft Red Winter (SRW). During MY 2013/ 14, the Dominican Republic imported 43% HRW, mainly for bread production; 36% HRS; and 21% SRW, primarily used for cakes and pastry.

During MY 2013/14, according the National Directorate of Customs (DGA) the Dominican Republic exported 142,927 MT of wheat flour and wheat products. Haiti continues to be the most important export market for Dominican wheat products, accounting for 77% of total exports. Other markets for Dominican exports include the U.S., Venezuela and some Caribbean Islands.

Stocks:

The wheat milling industry in the Dominican Republic is mostly a "just in time" operation. Wheat shipments from the US generally arrive on a reliable schedule with short shipping times, reducing the need to assume storage costs. Stocks are held by the private millers.

For Marketing Year 2014/2015 (MY 2014/15) Post forecasts ending stocks levels between 50-60,000 MT, and will likely remain similar for MY 2015/16.

Policy:

The DR applies no tariffs on the importation of wheat, but there are duties in place on wheat flour (4.67%) and pasta products classified under 1902.19 and 1902.30 (6.67%), along with a value-added tax or VAT1 of 18% on the latter. In the case of couscous (1902.40), the DR currently applies no tariff, but the product is subject to a VAT of 18%.

Wheat Dominican Republic

2013/2014

2014/2015

2015/2016

Market Year Begin: Jul 2013

Market Year Begin: Jul 2014

Market Year Begin: Jul 2015

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Beginning Stocks

80

80

108

51

56

Production

0

0

0

0

0

MY Imports

508

508

470

515

520

TY Imports

508

508

470

515

520

TY Imp. from U.S.

499

494

0

440

500

Total Supply

588

588

578

566

576

MY Exports

75

132

75

120

120

TY Exports

75

132

75

120

120

Feed and Residual

0

0

0

0

0

FSI Consumption

405

405

410

390

390

Total Consumption

405

405

410

390

390

Ending Stocks

108

51

93

56

66

Total Distribution

588

588

578

566

576

Yield

0.

0.

0.

0.

0.