Quinoa Prices Pushed by Demand
WASHINGTON - Jul 12/16 - SNS -- Quinoa prices tripled in recent years on the back of demand from health conscious consumers in the United States, Canada and Western Europe.
Reporting on the Industry in Peru, the U.S. agricultural attache for the country said sales were recently reported between U.S. $6,000 and $7,000 per metric ton (MT).
The world's largest importer is the United States, taking 27,894 MT during the 2015 calendar year, with Peru supplying 15,335 MT. U.S. imports of quinoa from Peru totalled 6,224 MT between January and May of this year, up 16% from the same five months last year, while imports from all suppliers climbed 6% to 15,335 MT.
The U.S. agricultural attache's report continues as follows:
Peru's Ministry of Agriculture and Irrigation sources estimate 2016 quinoa production coming in at about 108,000 MT, down some 14,000 MT from their earlier estimates. Peru expects to ship between 55% and 60% of this year's crop to the United States.
The 2015-16 El Nino Southern Oscillation (ENSO) weather phenomena came in weaker than anticipated. However poor rains in the southern highlands, along with lower than normal temperatures during the November-January period (spring-summer), disrupted crop production in the Departments (i.e., States) of Puno, Apurimac, Ayacucho, Huancavelica, and Cuzco. Drought-like conditions in the main quinoa growing areas drove down yields.
Producers are voicing concerns with crop price fluctuations and lower yields. Some are concerned that this, along with slower economic growth (estimated at 3.9% in 2016), will allow neighboring countries' quinoa producers to gain export market share in overseas markets.
Peruvian producers bemoan that European Union (EU) mechanized quinoa production is eight times more productive than their own production. EU quinoa production has reportedly increased 227% in 2012-15, but according to the Food and Agriculture Organization of the United Nations (FAO) still only accounts for about 8% of global production.
Overseas consumers' willingness to pay premium prices for quinoa is reportedly raising concerns among fair trade advocates in the United States that this grain will become unaffordable for most Peruvians. Some sources however comment that the higher prices being paid are actually benefitting quinoa producers, many of which have seen their household income double in recent years. Studies indicate that higher prices paid for quinoa have led producers to increase their own food consumption at the same time.
Expanded quinoa cultivation is raising overproduction concerns, raising the possibility of lower prices paid to producers. Quinoa prices already fell around 40% between September 2014 and August 2015. Sources report that this decrease is due to overproduction. We understand that the 2014-15 price drop lowered producers' household incomes by 5%.
Quinoa prices at about $2.00 per kilogram are showing signs of recovery, returning to near 2013 levels.
However, fair trade advocates reportedly favor a price closer to $2.60 per kilogram. Ministry of Agriculture and Irrigation sources clarify that Peruvian quinoa prices fluctuate most during the postharvest season, sometimes by as much as 30%.
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