Ecuador Offers Easy Import for Wheat Than Corn
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Wheat production ranks 21st among the 40 main crops produced in Ecuador, based on planted area. Wheat production in Ecuador is insignificant, with less than 7,000 hectares focused on the bread and pasta industries. Wheat production in marketing year (MY) 2022/23 (July-June) is forecast to increase to over 14,000 metric tons (MT) due to use of new, higher-yielding local varieties. The feed and milling industries are entirely dependent on imports.
The Government of Ecuador continues implementing a program to encourage Wheat production in the Highlands region by providing higher-yielding local varieties developed by the Ministry of Agriculture’s National Agricultural Research Institute, INIAP. The milling industry has maintained a Wheat production program since 2016, with an average of 4,600 to 5,000 hectares (ha) planted yearly. This program helped small farmers to increase their yields from 0.7 MT/ha to 2.20 MT/ha, by providing them with more productive local varieties. Last year the local harvest reached over 14,600 MT, a record high since 2002.
Wheat stocks are generally based on local production and depend on the quality and quantity of the harvest. Stocks in Ecuador continue to be estimated and forecasted lower due to increased use of existing stocks in the market. Wheat has been increasingly used by the animal feed sector, mainly for shrimp production, and due to higher consumption of carbohydrates (pasta and bakery) during 2021.
Wheat consumption in MY 2022/23 is forecast at 1.6 million metric tons (MMT), based on a 13-percent increase in demand per year. This increase is based on population growth and use in the feed industry. Additionally, bread and pasta are the cheapest and most consumed carbohydrate in Ecuador’s highlands after potatoes. Wheat consumption in Ecuador is almost equally divided between feed (48 percent) and human consumption (52 percent), represented by 22 percent for pasta production and 30 percent for bread and bakery. Wheat as a feed input is used for the shrimp and poultry industries.
Wheat has become an important input for shrimp feed, which is expected to displace corn by up to 15 percent in the formula and has fewer legal difficulties to import (approval of import permits) than corn. Ecuadorian per capita Wheat consumption in MY 2022/2023 is estimated at 46 kilograms/annum (30 kg. pasta and bakery, 16 kg. feed industry). In 2022, the pasta and bakery industries expect an increase in consumption compared with 2021 due to recovery of the economy.
Ecuador Wheat Import
Wheat imports in MY 2022/23 are forecast at a record of nearly 1.6 MMT, up 205,000 MT from the previous year. Until 2015, Ecuador utilized imported Wheat primarily in bread and pasta manufacturing. Ecuador incorporated more Wheat into animal feeds, fueled primarily by shrimp production, 73 percent of imported Wheat for feed is used in shrimp feeding. This estimate assumes that demand by the country’s animal feed industry will continue to increase. According to the AgFlow data, Canada led their import market with 0.4 MMT in Jan-Oct 2022, followed by the United States (0.3 MMT) and Argentina (0.2 MMT).
Major Wheat suppliers in calendar year (CY) 2021 were Canada with 64 percent of the market share, followed by the United States with 24 percent. The average imported Wheat price increased in 2021 to nearly $400 per MT. In recent years, U.S. Wheat has been considered the second option after Canadian Wheat due to the limited availability of Wheat varieties used by Ecuador’s bread industry and current shipping vessel shortages. Wheat from different sources is blended to reduce the average final price per metric ton for the bakery, pasta, and bread industries, according to ASEMOL, the Ecuadorian Millers Association.
Other sources: https://www.usda.gov
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