The quinoa market has been very quiet. During the past few months prices have been declining in both Bolivia and Peru. Black quinoa is the only exception, because its becoming quite scarce. Demand over the summer holiday period was as weak as expected but will most likely start to recover soon. This will also depend on how the pandemic further develops, as the main markets continue to struggle with controlling the virus.
The following factors might have an impact on the market in the coming weeks.
In Bolivia, many restrictions have been lifted, but border controls are still quite intense which is limiting the flow of goods between Peru and Bolivia. Usually, when there are less controls, there is a lot of smuggling between both countries which can lead to price increases.
Another factor to consider is the presidential elections, which will be taking place on October 18th. For the first time in over 15 years, there is a strong possibility that the winning party will not be the one led by Evo Morales; the “Movimiento al Socialismo”. There is a high probability that this will lead to some social conflicts and more specifically road strikes and city blockades like we saw in October 2019. This might have an impact on shipments out of Bolivia but we’ll have to see how everything unfolds the next few weeks.
While consumption in Europe has been relatively stable, the demand for organic quinoa in the United States is growing. This growth is driven by greater consumption at the retail level, and a greater consumer focus on healthy foods. Food-service has been hit hard and sales in that sector have plummeted during the pandemic. This is particularly relevant for the European market. Meanwhile, Bolivia continues to be more competitive in Organic White prices than Peru, which has given the country a good position to increase its sales.
White and red quinoa prices have remained fairly stable in the past few weeks. Low contraband levels are of course helping sustain this. Black quinoa prices are increasing quite fast due to its scarcity. Though conventional white prices in Bolivia are dropping. Other origins are competing at the conventional level which is driving prices down (see chart below). The gap between Organic and Conventional quinoa becomes wider.
We would advise our customers to take a position on white and black quinoa. If contraband resumes its natural levels, it will probably drive prices up in Bolivia and eventually lead to a price decrease in Peru. This will narrow the gap, but it’s unlikely that Peru will reach Bolivia’s current prices levels anytime soon. Political instability could negatively affect transit times, so our suggestion would be to plan well in advance. Please contact your sales manager for more information.