Dominican Wheat: 10% Import Subsidy
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The Dominican Republic has a population of 10.7 million people and is one of the countries whose Wheat usage is dependent on imports to supply the domestic market. In the marketing year of 2022/2023, Wheat consumption of the country is forecast at 451,000 metric tons (MT), virtually flat from MY 2021/22. Dominican imports are forecast at 610,000 million tons, a 2 percent increase from the last MY, due to increased exports of Dominican Wheat products and the adverse effects of the international Wheat process on local demand for Wheat products.
The country’s consumption continues to have one of the highest per capita Wheat consumption rates in the Latin American and Caribbean regions. Consumption of Wheat is forecasted at 451,000 million tons in the marketing year of 2022/2023, and it is on the ongoing recovery in tourism after the adverse impact of the COVID-19 pandemic on the HRI sector; which might be offset by the high prices of Wheat and Wheat products in the local market affecting local consumption. The situation is affecting the local demand for baked goods and pasta.
Trade Imports for MY 2022/23 forecasts Wheat imports at 610,000 MT, a 2 percent increase over the estimated amount to be imported during MY 2021/22. The increased forecast is expected as consumption and exports of Wheat, and Dominican products continue to grow.
As of 30 March 2022, the DR has imported approximately 60 percent of its Wheat from Canada and 37 percent from the United States in MY 2021/22. Others provided the rest. Most Dominican Wheat imports include Hard Red Winter, Soft Red Winter, and Hard Red Spring. According to AgFlow data, Canada led the Dominican Wheat import market with 0.28 million tons in 2021 – 2022, followed by the US (0.27 million tons) and Argentina (0.1 million tons). Quality issues, such as protein levels and industrial yields, continue to steer local customers to source more Wheat from Canada. Russia and Germany were minor volume shippers in the said period.
While most flour production is destined for the domestic market, the DR also exports considerable quantities of Wheat flour and other finished products (e.g., crackers and pasta) to neighboring Haiti. To a lesser extent, the DR has increased its exports of Wheat products to Puerto Rico, the United States, and other regional markets. Exports of MY 2022/23 see total exports of Wheat and Wheat products from the DR increase to 150,000 MT, driven by local Wheat products manufacturers’ expansion plans to reach international markets and the significant increase in informal trade in Wheat and Wheat products with Haiti.
Dominican Wheat Prices
International prices of Wheat have directly impacted the prices of locally-produced Wheat products in the domestic market. In 2022, Wheat flour prices increased by 13 percent, bread prices increased by 5 percent, and pasta prices increased by 13 percent. The country applies no tariffs on the importation of Wheat. Additionally, the DR used no duties on Wheat flour, pasta products, or couscous in 2020. However, they add 18 percent of the value-added tax.
The President declared ten policy measures to mitigate inflation in the DR due to the impact of the COVID-19 pandemic and the recent confrontation between Russia and Ukraine on March 2022. One was a six-month subsidy of 10% from imported corn, Wheat, soybeans, Wheat flour, and vegetable fat. However, at current levels of international Wheat prices, local sources indicate that such measures will not impact local prices for Wheat products.
Other sources: https://www.usda.gov
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