Miller Magazine Issue: 124 April 2020

Venezuela 89 MILLER / APRIL 2020 ezuelan population is declining as limited access to food drives many Venezuelans to migrate to neigh- boring countries. Amid this crisis, trading patterns are evolving. Venezuelans walk across the border to shop for cheaper rice in neighboring Colombia. Russia, Tur- key, and China have all emerged as important sup- pliers of commodities and processed food products to Venezuela. Unless the Venezuelan government undertakes massive economic and political reforms, production and consumption of traditional grain and feed crops will drop again in MY 2020/21. Some of the de- crease may be offset by increased imports, depend- ing on private sector’s continued ability to import and the Maduro government’s fiscal constraints. During the market year 2020/21, a decrease in production is forecast across most commodities in Venezuela. Farmers are dealing with acute shortag- es of agricultural inputs such as seeds, fuel and fer- tilizers. With dwindling production and limited im- ports, USDA forecasts declining grain availability to further squeeze the diet of Venezuelan consumers. NEAR ZERO WHEAT PRODUCTION Venezuela is almost entirely dependent on im- ported wheat for domestic consumption. There may be a few thousand hectares of experimental wheat grown in the country. The Venezuelan Millers As- sociation indicates that the domestic wheat supply has a very marginal impact on the market. Further- more, the dearth of agricultural inputs in the current year will further challenge any domestic production. Without broad political and economic reform to al- low for the import of inputs, production in the fore- cast year will be near zero. In MY 2020/21, USDA’s Caracas post expects continued declines in wheat consumption, reaching only 775,000 metric tons. The decrease is explained by a shrinking population, deteriorating govern- ment revenues, and continued high inflation. Con- sumption in MY 2019/20 is expected to only reach 780,000 metric tons. With the global economic downturn associat- ed with the novel coronavirus and the ongoing oil price wars, government revenue for public sector purchases will be limited in the coming year. Ad- ditionally, total consumption will drop as refugees continue to flee the country. UN estimates put the 2020 Venezuelan population at 28.4 million, the lowest level in a decade. Some of the decreases in Venezuelan consumption will likely reappear as increased consumption in neighboring Colombia, Peru, and Ecuador. Since Venezuelan per capita consumption of wheat peaked in 2014, it has been on a steadily de- cline. In 2014, the post estimates that Venezuelans consumed 61.6 kilograms of wheat per year. Per capita consumption currently stands at 28.9 kilo- grams per year, as high inflation eroded purchasing power and dwindling government revenues limited public-sector imports. USDA Caracas post estimates that Venezuela will import 775,000 metric tons of wheat in MY 2020/21. The post also decreases MY 2019/20 wheat imports 22 percent to 780,000 metric tons. The decrease is based on slower than expected shipments in the current year.