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GIEWS Country Brief: Bolivia 23-May-2022

Countries
Bolivia
Sources
FAO
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FOOD SECURITY SNAPSHOT

  • Production of 2022 maize and sorghum crops expected at below‑average level

  • Import requirements of cereals in 2021/22 anticipated at low levels

  • Prices of wheat flour soared in March 2022 and reached 20 percent above their levels one year earlier

Production of 2022 maize and sorghum crops expected at below‑average level

Harvesting of the 2022 main maize crop, which accounts for about 75 percent of the annual production, is ongoing. Production is anticipated to be below the average, mainly reflecting a low level of the area sown. The high planting intentions, triggered by the below‑average output obtained in the precedent minor season, did not materialize as heavy rains in December 2021 caused flooding and affected planting operations. In addition, yields are estimated at low levels as precipitation amounts between January and March 2022 have been generally below the long‑term average.

The 2022 aggregate maize production, including the dryness‑affected minor season crops harvested during the third quarter of 2021, is expected to be below the average and significantly less than the 2021 bumper production.

The harvest of the 2022 minor sorghum crop is nearing completion in the key producing Santa Cruz Department. Production and is estimated to be below the average reflecting dry weather conditions during the first quarter of 2022. The main season output was also at a below‑average level as cold snaps and prolonged dry spells severely affected crops at grain‑filling stages.

Planting operations of the 2022 main wheat are underway. The area sown is officially forecast at an above‑average level, reflecting higher year‑on‑year market prices of wheat and incentive measures put in place by the government. These measures include the provision of loans at a 0.5 percent interest rate to wheat farmers via the SIBOLIVIA programme and an increase in wheat procurement prices (from USD 335/tonne in 2021 to USD 390/tonne in 2022). The Food Production Support Company (EMAPA) will also increase the volume of purchases from 130 000 tonnes in 2021 to 211 000 tonnes in 2022. Weather forecasts indicate below‑average precipitation amounts during the May to July period, with potentially adverse effects on yields.

Imports of cereals in 2021/22 anticipated at low levels

Cereal import requirements in the 2021/22 marketing year (July/June), mostly wheat, are anticipated at a below‑average level of 580 000 tonnes. The low level of requirements reflects abundant supplies from the above‑average harvests and imports in 2019/20 and 2020/21. Imports of wheat between July 2021 and February 2022 were more than 30 percent lower compared to the same period of the previous five years. High export wheat prices of Argentina, the country’s main supplier, also contributed to a decline in imports.

Prices of wheat flour soared in March and reached 20 percent above its levels one year earlier

After being stable throughout 2021, average wholesale prices of wheat flour in La Paz markets rose by 20 percent on a monthly basis in March 2022 due to the upsurge in international quotations. While prices of rice remained steady since September 2021, prices of yellow maize increased in March 2022 reflecting low market supplies. Amid increasing prices, the EMAPA announced to release 100 000 tonnes of yellow maize for the feed industry. In March, prices of rice and yellow maize were about 5 percent above their year‑earlier levels.

Impacts of global energy and food price shocks on domestic food security

High international prices of natural gas and vegetable oil are expected to boost the export earnings of the country, as gas and soybean meal/oil are the major exportable commodities in value terms. Despite the high international energy and food prices, the country did not experience an upsurge in inflation, with the annual inflation rate kept at about 1 percent in April 2022. The overall stable prices could be attributed to the fixed exchange rate system (currently BOB 6.91/USD 1) and subsidized fuel and bread prices. Prices of gasoline and diesel are fixed at BOB 3.7/litre (equivalent to USD 0.5/litre) since 2010. Prices of a loaf of bread (pan de batalla) have been also pegged at BOB 0.5 since 2016. However, prices of wheat flour rose sharply in March 2022 following upward trends in the international markets, as the country depends on imports of wheat grain and flour to cover about 60 percent of its domestic consumption requirements. In April 2022, the government implemented a series of policy measures to boost an expansion of area sown to the main wheat crop (production paragraph above). After the domestic production of fertilizers (urea and potassium chloride) started in 2018, the country has been a net exporter of fertilizers during the 2019 to 2021 period. Although the high international energy and food prices are likely to have a limited impact on food production and livelihoods of households, they could widen the country’s fiscal deficit, given the heavy subsidies implemented on fuel and bread.