The quinoa market has been stable in the past few months, but the recent price increase of Bolivian raw material will have an impact on prices. We think that prices could increase even more in the coming weeks. We will share the latest information we received from suppliers and farmers that will give a clear picture of new crop developments and will be useful to anticipate price fluctuations.
The price increase is mainly caused by the bad weather conditions in Bolivia. Very strong winds are causing damage to the recently sown quinoa plants and forcing many farmers to replant. This causes fear among farmers that they might not have a good crop next year so they save their product as precaution. When farmers see that prices are going up, they tend to speculate. The effect on yields will only be assessed in the next couple of months. Contraband to Peru is still very strong and is also causing pressure on prices. For the reasons mentioned above prices will probably go up a bit until January-February, but if the crop is looking good they will go down and stabilize in March-April when farmers need working capital to cover the harvesting costs. In the end it will depend on the conditions of the 2018 crop.
The latest polls of our Bolivian supplier show that 74% of their farmers are expecting to plant more hectares and 16% will plant the same amount of white quinoa as last year. Red and black quinoa should be planted in an approximate equal amount as last year. It is too soon to get a precise forecast for the new crop volume which will depend on many factors such as wind, rain and frosts, but if the conditions are similar as last year, the crop will be bigger than 2017’s crop.
The national agricultural statistics show that the total Peruvian quinoa production has been similar in 2016 and 2017. The total production in 2016 was 79,269 mt, while the production in 2017 will be approx. 78,900 mt. Please note that the last 3 months of 2017 are not yet included, but this won’t result in a big difference since the production is very small in these months. The average yield is still 1,25 mt/ha, which is basically the same as last year.
Puno is still the main production area with 50% of the total production, then Ayacucho follows with 19%, Apurimac and Andahuaylas with 18% and then Arequipa with 5%. Production in Arequipa has reduced by over 50% since prices decreased. In this area it’s easy to replace quinoa with other products.
The forecast for the new crop (2018) is looking good. So far there have been enough rains and overall good weather conditions. The quantity of hectares that have been sowed is similar to 2017’s crop. We will have more information in February 2018.
Export figures show that Peru exported 5% less than last year. Bolivia has finally recovered some market share. Peru’s largest market is still the US, although they bought 15% less quinoa in Peru this year. Meanwhile, Europe did increase it’s imports from Peru; European countries bought 7% more Peruvian quinoa. There also have been exports to ‘new markets’ like Taiwan, Vietnam and the United Arab Emirates. We have been informed that quinoa will be included in the free trade agreement between China and Peru. If the demand from China increases this could potentially influence next year’s prices.
At Rhumveld we have a very strict quality control system which includes a rigorous approval process for all our suppliers. As we take health and food safety very seriously, we have implemented a comprehensive testing policy for quinoa, including third party sampling and testing in EU accredited labs. Please let us know if you are interested to receive more information about our procedures.
Besides programs related to technical assistance and compliance with Organic Regulation Standards and organic certification, our suppliers also have additional projects to support farmers with their quinoa production. Please find below a recent picture of the irrigation project of our partner in Bolivia. The goal is to double quinoa yields from half a metric ton per hectare to 1MT/ha. They have already implemented five irrigation systems. Quinoa can now be rotated with legumes and other crops that need more water than sporadic rain showers. This way they can provide crop alternatives and help the environment.
There are also projects to improve soil health for sustainable farming by increasing the carbon content in soils with compost. The Soil Health for Sustainable Farming project, which has already resulted in 3000 cubic meters of manure compost , will enable the fertilization of 600 hectares and increase yields and profits benefitting 190 quinoa farmers. Saponin is also being recycled as an ingredient for compost. The latest acquisition is a quinoa thresher that will be used to reduce farmers’ post-harvest expenses.
These are just a few examples of many projects that have been started in order to increase the yield, reduce the environmental impact and improve the living conditions of the farmers.