The quinoa market is quite unstable at the moment. Lockdowns have been extended in both Peru and Bolivia and exporters continue to face challenges to transport and purchase raw material. Food-grade containers, trucking and vessel space are scarce whilst the lockdown measures have also forced some companies to significantly scale down their capacities. Meanwhile, access to the communities is now slowly improving, which is allowing more quinoa to enter the market. New crop is looking good in both countries, which indicates that there will be a lot of quinoa available. Demand has been picking up in the past few weeks, as most people are eating and cooking more at home, but the long-term economic outlook and its impact on the quinoa industry is still very unclear. Yet a careful analysis would suggest that the market is trending downwards.
The 2020 crop looks good and has an estimated volume of approx. 65-67,000mt. Exporters have been able to start buying more raw material, however the quantity is still limited. Companies had to significantly scale down their capacities. Organic certified quinoa is very scarce and prices have risen. The supply situation is expected to ease with the new harvest. It is uncertain how demand will develop in the next coming months. Quinoa is still relatively expensive compared to rice, beans and other staples. The volatile exchange rate can also have an impact on prices. Besides, many Peruvian exporters now have a limited working capital to purchase and store raw material. Although precise projections are difficult at the moment, the significant price difference between Bolivian and Peruvian organic quinoa combined with the large harvest suggests that the market will stabilize at lower levels in the coming 2-4 weeks. Prices of conventional white chia are expected to drop, but colored quinoa prices should be close to the bottom.
The situation in Bolivia is very confusing. Lockdown measures are quite strict which limits the access to many communities. There are also many logistical challenges, as food grade containers are scarce and border crossings to the port of Arica face delays. The increased demand created a bit of pressure but should be corrected once the pandemic is contained. The harvest is almost over, yields have been notably good – even better than the last three years. However, there is little red quinoa this year so this might put pressure on prices later on. Pressure on supply continues to be low, especially with the low levels of contraband at the Bolivian/Peruvian border. Besides, there is still a decent amount of carry-over from last season available. This leads us to believe that white quinoa prices won’t be very volatile this year but it is important to keep an eye on red quinoa as this product might become scarce.