Dominican Wheat: Argentina chases Canada
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For MY 2023/24, Post forecasts the Dominican Republic’s ending Wheat stocks at 220,000 MT, up five percent compared to MY 2022/23 estimates, which are higher than usual. Although the Wheat milling industry in the Dominican Republic is primarily a “just-in-time” operation, with short and reliable shipment times from the United States, Canada, and Argentina, during CY 2022, local millers have made additional efforts to boost stocks to mitigate the effects of rising international Wheat prices.
Millers’ storage capacity is limited, varying considerably by the processor. Among the six mills operating in the country, collective storage capacity is estimated at 160,000-200,000 MT. Recent developments indicate that this capacity may change in the short to medium term, as some millers have taken measures towards increasing storage and processing capacity to meet growing Wheat demand.
The Dominican boasts a daily milling capacity of around 3,320 MT, with a current average utilization rate of 65-70 percent, divided among six different processors: Molinos Modernos, Molinos del Cibao-Grupo Bocel, Grupo J. Rafael Núñez, COOPROHARINA, Molinos del Higuamo, and César Iglesias. The local Government owns half of Molinos Modernos, the largest mill in the country. Molinos Modernos and Molinos Valle del Cibao process nearly 80 percent of all Wheat imports. The main product is Wheat flour, although several companies, such as Grupo Bocel, also produce crackers, cookies, and pasta. Additionally, Wheat flour imports feed into a large domestic baked goods industry.
According to Euromonitor International, the retail value of baked goods sold in the Dominican calendar year (CY) 2023 is estimated at US$401 million, a six percent jump over CY 2022. The largest share of baked goods sold in the Dominican continues to be unpackaged, leavened bread, which includes the local staple bread called “pan de agua” and “pan sobao,” which are consumed regularly by a broad spectrum of the population, especially in urban areas. Industrial bakers, along with small and medium-sized bakeries, produce staple bread and distribute it to various supermarkets, “mom-and-pop” stores, markets, or other bakeries.
The Dominican Government’s feeding programs, especially the school feeding program, distribute many of these baked goods. Meals, which reach more than 1.5 million public school children nationwide, include bread, cookies, and muffins. In 2022, the local Government subsidized flour production to the tune of DOP$3.5 billion ($64 million) to ensure that retail prices continued to fall within the consumer budget. While most flour production is destined for the domestic market, the Dominican also exports considerable quantities of Wheat flour and other finished products (e.g., crackers, pasta) to neighboring Haiti.
Wheat Trade in Dominican
The post estimates local consumption of Wheat and Wheat products will remain stable at 451,000 MT during MY 2022/23. Wheat flour exports between October and December 2022 have increased significantly, mainly to Haiti. This led the Dominican to implement a temporary month-long ban on Wheat flour exports to protect the local market and secure availability, particularly for the holiday season. The country continues to benefit from a large milling industry and imports most of its Wheat from the United States and Canada. However, in 2022, millers started importing significant quantities from Argentina due to competitive prices.
According to AgFlow data, Dominican Republic imported 55,706 tons of Wheat from the United States in Jan-Mar 2023, followed by Canada (32,400 tons) and Argentina (30,000 tons). For MY 2023/24, Post forecasts imports of Wheat and Wheat products in the Dominican at 663,000 MT, a two percent increase over the previous marketing year estimate. The increased forecast is due to manufacturers’ international expansion plans, which demand more raw materials to produce Wheat products. In addition, estimates align with expected population and HRI sector growth.
Other sources: USDA
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