Production:

Rice, Milled

2013/2014

2014/2015

2015/2016

Market Begin Year

Apr 2013

Apr 2014

Apr 2015

Peru

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

405

405

400

400

0

400

(1000 HA)

Beginning Stocks

285

285

270

257

0

187

(1000 MT)

Milled Production

2,156

2,156

2,100

2,150

0

2,150

(1000 MT)

Rough Production

3,125

3,125

3,043

3,116

0

3,116

(1000 MT)

MY Imports

193

180

240

220

0

220

(1000 MT)

TY Imports

220

220

240

220

0

220

(1000 MT)

TY Imp. from U.S.

0

2

0

2

0

20

(1000 MT)

Total Supply

2,634

2,621

2,610

2,627

0

2,557

(1000 MT)

MY Exports

70

70

70

70

0

70

(1000 MT)

TY Exports

70

70

70

70

0

70

(1000 MT)

Consumption and Residual

2,294

2,294

2,350

2,370

0

2,370

(1000 MT)

Ending Stocks

270

257

190

187

0

117

(1000 MT)

Total Distribution

2,634

2,621

2,610

2,627

0

2,557

(1000 MT)

Yield (Rough)

7.7160

7.7160

7.6075

7.7900

0.0000

7.7900

(MT/HA)

Rice production in MY 2015/16 is forecast at 2.15 MMT (milled basis), remaining in the same level as current production. Rice production has reached a maximum level and is now limited by water availability and demand.

The total rice harvested area for MY 2015/16 is forecast to fall to 400,000 hectares, about the same as the previous year.

With good weather conditions and plentiful water, rice production in CY 2014 reached almost 2 MMT. Rice production is concentrated in Peru's arid northwestern coastal region (mainly in Lambayeque and Piura provinces). Production contends with poor quality soils and increasing soil salinization due to field flooding irrigation techniques. Peruvian rice is surface irrigated, dependent upon water draining from Andean rivers hundreds of kilometers away. Average rice farm size is about five hectares.

The government of Peru has sought with some success to expand rice cultivation along the eastern slope of the Andes (particularly in San Martin province). The policy has failed to fully dislodge the coastal rice producers. These low-income, small-scale farmers currently have no real incentive to switch to a less water intensive crop (e.g., quinoa or cotton). Water fees charged to farmers are almost non-existent (instead of the $250/hectare that should be assessed), and along with decent returns, hinder government attempts to shift production away from the arid coastal areas.

Rice is normally harvested April through May, averaging $317 per MT in CY 2014. This price represents a 3.6 percent increase compared to the previous year.

Despite the bulk of rice cultivation being undertaken by smaller producers, whose quality and yields fluctuate widely, yields averaging 7.82 MT/hectare are respectable (the world average is about 4 MT/hectare). Some farmers are reporting yields as high as 14 MT/hectare.

Consumption:

Rice is a staple product in Peru; per capita consumption hovers at 60 kilograms/year. Rice is traditionally sold in 50-kilogram sacks. But with the expansion of supermarket chains, consumer habits are changing towards prepackaged, one-kilogram bags.

Trade:

Rice imports in MY 2015/16 at 220,000 MT, remaining at the same level as in the previous year. Imports in CY 2014 were 208,077 MT, led by Uruguay with 75 percent of the market share. Uruguay has dominated imported the rice market in Peru historically due to U.S. rice's less competitive price and a longstanding relationship between the main Uruguayan supplier and Peru's major importer. The former is said to supply advantageous credit conditions.

Import Trade Matrix

(Metric Tons)

Commodity

Rice

Time Period

CY 2014

Imports from:

United States

7,834

Imports from Others

Uruguay

156,989

Brazil

32,177

Thailand

10,303

Paraguay

556

Total from Others

200,025

Others not Listed

218

TOTAL

208,077

FAS Lima estimates that some 32,000 MT of paddy rice were unofficially exported from Peru to Ecuador in CY 2014.

Policy:

Rice enters duty-free. Peru's unilateral elimination of import tariffs on rice eliminated many of the trade advantages afforded by the U.S.-Peru Trade Promotion Agreement. However, the PTPA establishes a duty-free TRQ of 72,000 MT for U.S.-origin rice with annual increases of 6 percent and full duty-free access within 17 years.