Chia Seed Market Report 19.07.24
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The Chia harvest is underway in South America. Prices initially dropped at the start of the harvest but are now rebounding. Demand remains lacklustre and isn't expected to increase significantly during the summer holiday period. This upward price movement is driven by significantly reduced yields in Paraguay. Throughout June, the market was at a standstill, with buyers expecting lower prices than exporters were willing to offer. Importers weren't in a rush to purchase due to ample 2023 crop inventories. However, in the past two weeks, the situation has shifted slightly. Some buyers now need to cover early crop shipments for July and August, and there are more reports of disappointing yields from certain growing zones.
Logistics are becoming a significant challenge. The seaports of Montevideo and Buenos Aires are experiencing strikes and a shortage of shipping containers due to extraordinarily high demand from China. Freight costs have surged, and issues at ports, along with low water levels in the Paraguay River, are expected to cause delays. The price range in the market remains wide as many exporters are cautious about their commitments.
Crop Update
- Argentina: The area under Chia cultivation in Argentina is reported stable or slightly decreased. Climatic conditions were favourable at the beginning and the middle of the crop cycle, but some areas experienced too dry or cold weather as the harvest approached. Yields are somewhat lower than expected, totalling about 4,500-5,000 MT.
- Paraguay: Paraguay has significantly increased its Chia cultivation, with an estimated 150,000 and 180,000 hectares planted. This expansion drove the price drop in May and June, particularly since no frosts were reported during those months, leading to an expectation of good quality. However, the largest growing region in northern Paraguay experienced very low yields due to hot, dry weather and delayed rains. Yields as low as 200kg/ha were reported in areas that previously reached 700kg/ha. This has surprised growers and exporters, causing farm gate prices to rise. With 40-60% of Paraguay's Chia crop yet to be harvested, the larger area under cultivation and better yields in the southern, eastern and central zones may still result in a 2024 crop slightly larger than last year's. The size of the crop will be re-evaluated in September and October but it is currently projected at 50,000-55,000 MT.
- Bolivia: Bolivia's Chia crop suffered from a lack of rain. Although the area under cultivation has slightly increased at 30,000 hectares, lower yields are leading to projections of a 10,000-11,000 MT crop. To cover the shortage, Bolivian exporters are purchasing Chia from Paraguay.
via Porto International