Production:

Wheat

2013/2014

2014/2015

2015/2016

Market Begin Year

Jul 2013

Jul 2014

Jul 2015

Peru

USDA Official

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USDA Official

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USDA Official

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Area Harvested

155

152

150

145

0

145

Beginning Stocks

246

179

553

121

0

125

Production

235

231

230

225

0

225

MY Imports

2,078

1,849

1,700

1,900

0

1,900

TY Imports

2,078

1,849

1,700

1,900

0

1,900

TY Imp. from U.S.

624

470

0

600

0

600

Total Supply

2,559

2,259

2,483

2,246

0

2,250

MY Exports

86

115

75

115

0

120

TY Exports

86

115

75

115

0

120

Feed and Residual

70

70

70

70

0

70

FSI Consumption

1,850

1,953

1,875

1,936

0

1,940

Total Consumption

1,920

2,023

1,945

2,006

0

2,010

Ending Stocks

553

121

463

125

0

120

Total Distribution

2,559

2,259

2,483

2,246

0

2,250

1000 HA, 1000 MT, MT/HA

Wheat production in MY 2015/16 (July/June) is forecast at 225,000 metric tons (MT), similar to production in the previous year. Wheat production in Peru has been decreasing slightly from 240,000 MT three years ago to current values. Farmers are shifting away from less profitable wheat cultivation to more lucrative crops such as quinoa. Local wheat currently trades at about $445 per MT, compared to $5,000 per MT that producers can reasonably expect to receive for quinoa.

Wheat is a minor crop in Peru, concentrated mostly in the temperate southern highlands at between 2,800 and 3,500 meters above sea level. Wheat production is rudimentary and cultivation remains limited by mountainous geography. Wheat production is limited to mostly soft wheat, which is often consumed as purees or as a soup ingredient and not good for milling.

The total wheat crop area harvested for MY 2015/16 is forecast to fall by 7,000 hectares to 145,000 hectares. The total wheat crop area in MY 2013/14 was 152,000 hectares. The wheat area harvested varies significantly from one year to the next depending on prices, farmers' profit margin expectations, and the profitability of alternative crops such as quinoa, barley and oats. The average yield in CY 2014 was 1.5 MT/hectare.

Domestic millers have established a program promoting durum wheat cultivation for pasta production. They provide small farmers with seed and technical assistance, as well as purchasing production. Farmers are now producing around 12,000 MT of durum wheat for a pasta plant in Arequipa (approximately 1,000 kilometers south of Lima). Millers expect durum wheat production to reach 25,000 MT within the next few years.

Consumption:

Wheat consumption in MY 2015/16 is forecast at 2.01 MMT, a slight increase from the previous year. Overall wheat consumption is 64 kilograms per person.

Peru produces about 1.4 MMT of wheat flour per year. Of this amount 63 percent is used by the local baking industry, 20 percent goes to pasta manufacturing, 12 percent to the cookies and crackers sector and 5 percent for domestic use. Roughly 70 percent of domestic flour is sold through traditional markets, while only 30 percent of flour is sold in supermarkets.

Per Capita Consumption

Product

Kilograms

Pasta

11.9

Cakes and pastry

1.2

Cookies and crackers

1.7

Bread

28.0

Flour

1.4

Grain

2.8

The wheat milling industry highly concentrated. Of the 23 domestic millers, the largest one alone accounts for over 60 percent of total wheat milled. The country's four largest millers are responsible for around 85 percent of the wheat milled in Peru.

Bread consumption in Peru is 28 kilograms per person, one the lowest in South America. Per capita consumption of bread is 37 kilograms in Ecuador and 95 kilograms in Chile. Bread in Peru is normally purchased fresh in bakeries. Per capita consumption of bread loaves is only 250 grams/person, annually despite a two-fold increase over the last seven years.

Peruvians are heavy consumers of pasta. Peru, with pasta consumption at 11.9 kilograms per person, is South America's second largest pasta consumer. Pasta consumption is concentrated in the capital city of Lima, which accounts for half of all pasta consumed nationwide. Sources indicate that pasta consumption is now growing at a faster pace in Peru's provinces than in the capital thanks to economic growth. Pasta production in Peru totals 220 MT per year.

Peruvian consumption of cookies and crackers remains low by regional standards at only 1.7 kilograms per year. Cookies and crackers production is about 80,000 MT per year.

Trade:

Wheat imports in MY 2015/16 are forecast at 1.9 MMT, increasing 2.8 percent compared to MY 2013/14. Wheat imports in CY 2014 were 1.88 MMT. Canadian wheat holds the largest market share at 68 percent in CY 2014, followed by imports from the United States with 19 percent and Russia 13 percent. Argentine wheat imports into Peru were non-existent in CY 2014. U.S. and Canadian wheat exports to Peru have benefited from falling Argentine wheat production. Argentina's drop is due primarily to non-weather related government (Argentine) price fixing and export restrictions that are inducing farmers to stockpile or move to more lucrative soybean exports.

Peru's wheat millers are increasingly sophisticated. Over the last two decades, the industry has shifted from importing solely hard red winter wheat (HRW) to a mix of different wheat types (e.g., soft, spring, white, durum northern spring) for blending purposes.

Import Trade Matrix

(Metric Tons)

Commodity

Wheat

Time Period

CY 2014

Imports from:

United States

351,054

Imports from Others

Canada

1,270,364

Russia

237,995

Uruguay

19,426

Total from Others

1,527,785

Others not Listed

0

TOTAL

1,878,839

Policy:

Wheat is imported duty-free. Although Peru does not specifically promote wheat production, the government does have in place credit and technical assistance programs. These programs seek to improve crop quality and protect consumers from international wheat price spikes.