Chia Production Rebounds in Paraguay and Bolivia

Chia Seed

Bolivia

Paraguay

Published Jun 21, 2022

After early frost wiped out nearly half of South America’s chia crop in 2021, production levels in the world’s top two producers could return to normal. The harvest has already started in South America and the danger of a recurrence of last year’s damage has mostly passed. As the new crop comes in, it brings relief to an extremely tight supply situation. Prices in Bolivia have started to retract from the highs made in December and January, based on the unit value of export.

Paraguay’s Crop Bounces Back

Paraguay is the world’s largest producer of chia seeds and produces around 30,000 mt annually. Chia seeds’ drought tolerance makes them the ideal crop for lower rainfall areas in South America, however, it is a crop vulnerable to frost. Chia seeds are planted in spring and have a long growing season. The harvest takes place in June and July, which means early frost can cause massive damage, as witnessed in 2021 when frost cut the crop in half in South America. Despite the much lower production, Paraguay was able to maintain a respectable level of exports, by tapping into reserve stocks. Exports in Q1 2022 were only 15% lower than in 2021, at 5,417 mt. Currently, there is very little chia available, but the first shipments from the new crop will start in July.

The industry was on edge for the last couple of months as a repeat of last year’s events would have wrecked the already tight supply. This was especially true given the chia crop was planted later than usual, due to a delay in the soybean harvest. However, the chia harvest has started and the risk of frost damage has passed for the most part. According to Tridge’s representative in Paraguay, Enrique Albera, the crop currently being harvested could bounce back to 25,000 to 30,000 mt. There is a lot of speculation on prices, with some believing the incoming harvest will pull prices down, and others hoping for strong demand as the industry rebuilds reserve stocks.

Source: ITC Trade Map

Prices Start to Soften in Bolivia

As in Paraguay, Bolivia lost up to half of its chia crop in 2021. Bolivia produces around 15,000 mt of chia per year, with the exception of last year. The harvest has also started in Bolivia, and production could be back to normal levels. Prices have moved slightly lower due to harvest pressure and reports that the quality of the crop is not as good as in previous years. Based on the unit value of exports, as reported by Bolivian Customs, prices have decreased 13% since the start of the year, and the unit value of exports was USD 3.15/kg.

Source: ITC Trade Map

Bolivia Plans to Challenge the Number One Spot

According to Bolivia’s Vice Minister of Foreign Trade, Benjamín Blanco, the country aims to overtake Paraguay as the globe’s number one producer and exporter of chia, by specifically targeting China. The details of this will be achieved have not been made public. Bolivia raked in USD 27 million from chia exports in 2021, but aims to increase this number to USD 70 million annually. According to Benjamin Blanco, Bolivia will be targeting China as their main destination for increased chia production and exports. Over the last decade, mainland China hardly featured on Bolivia’s list of chia export destinations, with only 2 mt going there in 2015. Bolivia’s chia exports have also shown a swing to the American markets, with Europe opting for Paraguayan chia.