Wheat Imports to Serve as a Substitute for Corn in Ecuador
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Ecuador’s Corn production in MY 2023/24 (May-April) is forecast to be slightly under 1.6 MMT, seven percent higher than the MY 2022/23 estimate of 1.46 MMT. This forecast is based on an additional 60,000 planted hectares but a reduction in yield to 3.92 MT per hectare. This 8 percent drop in yields is due to reduced use of fertilizers, mainly urea, because of continued price increases. In some farms, mechanization and advanced technology have been implemented, but Corn is still produced primarily by small and subsistence farmers.
Overall, planted area has increased based on higher prices obtained during CY 2022. However, the trend of small Corn growers switching to other crops and products, such as cacao or cattle production, continues. Corn production in Ecuador is steadily moving from small to medium and even large producers, caused by increased production costs. The previous Minister of Agriculture, who resigned in February 2023, had supported programs focused on crop improvement and fertilizer subsidies to lessen the impacts of higher production costs on small farmers.
Ecuadorian Corn consumers continue to pay significantly higher prices for domestically produced Corn. As of February 2023, the Ministry of Agriculture and Livestock (MAG) had set the official Corn price for 2023 at $15.57 per hundredweight ($343.18 per MT), representing an eight percent increase compared with last year. This has forced many agro-industrial sectors to turn to substitutes, mainly wheat.
Corn consumption in Ecuador is forecast at just under 1.8 MMT in MY 2023/24, slightly higher than the MY 2022/23 estimate. This is primarily driven by the rebound of the poultry and pork industries and the continued growth of the shrimp industry. The pork sector increased its production by 50 percent during CY 2022. Ecuador’s agro-industrial industry continues to change its consumption habits and grow the use of Corn substitutes. However, some of the increased Corn consumption during MY 2022/23 could be attributed to higher prices of substitute grains such as wheat.
Ecuador’s Feed Producers Association (APROBAL) has indicated that in addition to wheat, animal feed producers are increasingly experimenting with and using Corn alternatives such as rice byproducts that are available domestically and imported distillers’ dried grains with solubles (DDGS). As of February 2023, DDGS can be imported without the value-added tax (VAT) of 12 percent. This product is already used in Ecuador’s shrimp industry, and with this VAT reduction, it will become more economical to use in the pork and poultry sectors.
FAS Quito sources estimate that the national poultry industry utilizes 80-85 percent of local feed production, and 15-20 percent is taken up by other livestock production, primarily swine. Ecuador’s yellow Corn consumption is dependent on the demand of the animal feed sector and the availability of lower-priced Corn substitutes. The poultry sector is forecast to remain stable in 2023, despite recent outbreaks of highly pathogenic avian influenza, which have, so far, remained limited in commercial flocks.
Per capita consumption of poultry meat remains at 28 kilograms (kg) and 212 eggs per year. Statistics from Ecuador’s national poultry association (CONAVE) show that in 2022, the poultry flock reached 265 million birds, an increase of one percent from the previous year. Meanwhile, the national pork producer’s association (ASPE) announced that the per capita consumption of pork meat for CY 2022 was 11 kg.
Corn Import in Ecuador
According to AgFlow data, Brazil shipped 67,461 tons of Corn to Ecuador in Jan-May 2023, followed by Argentina (61,000 tons). Ecuador’s Corn imports in MY 2023/24 are forecast to reach 188,000 MT, the yearly deficit defined by MAG. Recently, MAG has changed its strategy to reduce grain holding and waiting for local prices to increase and is now allowing wheat imports to serve as a substitute for Corn.
Other sources: UDSA
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