Voluntary Report - public distribution

**Date:** 3/8/2004

**GAIN Report Number:** PE4003

PE4003

**Peru**

**Grain and Feed**

**Rice Update**

**2004**

**Approved by:**

![](media/image1.wmf)Melinda D. Sallyards

U.S. Embassy

**Prepared by:**

Gaspar E. Nolte

**Report Highlights:**

Rice production in 2004 is expected to fall due to drought during the
planting season. Post's revised production estimate is 1.15 MMT for
2004, a reduction of 28 percent compared to the previous year. Imports
are now forecast at 150,000 MT a significant increase compared to the
15,000 MT imported in 2003.

Includes PSD Changes: Yes

Includes Trade Matrix: No

Unscheduled Report

Lima \[PE1\]

\[PE\]

  ---------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
  **PSD Table**                                                                      

  **Country**      **Peru**                                                          

  **Commodity**    **Rice,                                     (1000                 
                   Milled**                                    HA)(1000              
                                                               MT)                   

                   2002       Revised    2003       Estimate   2004       Forecast   UOM

                   USDA       Post       USDA       Post       USDA       Post       
                   Official   Estimate   Official   Estimate   Official   Estimate   
                   \[Old\]    \[New\]    \[Old\]    \[New\]    \[Old\]    \[New\]    

  **Market Year               01/2003               01/2004               01/2005    MM/YYYY
  Begin**                                                                            

  Area Harvested   315        317        320        326        0          240        (1000 HA)

  Beginning Stocks 243        92         298        98         353        77         (1000 MT)

  Milled           1550       1482       1555       1597       0          1150       (1000 MT)
  Production                                                                         

  Rough Production 2246       2148       2254       2314       0          1667       (1000 MT)

  MILLING RATE     6900       6900       6900       6900       0          6900       (1000 MT)
  (.9999)                                                                            

  TOTAL Imports    40         34         40         15         0          150        (1000 MT)

  Jan-Dec Imports  40         34         40         15         0          150        (1000 MT)

  Jan-Dec Import   0          1          0          0          0          1          (1000 MT)
  U.S.                                                                               

  TOTAL SUPPLY     1833       1608       1893       1710       353        1377       (1000 MT)

  TOTAL Exports    10         30         5          135        0          10         (1000 MT)

  Jan-Dec Exports  10         30         5          135        0          10         (1000 MT)

  TOTAL Dom.       1525       1480       1535       1498       0          1350       (1000 MT)
  Consumption                                                                        

  Ending Stocks    298        98         353        77         0          17         (1000 MT)

  TOTAL            1833       1608       1893       1710       0          1377       (1000 MT)
  DISTRIBUTION                                                                       
  ---------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------

**SUMMARY**

A severe drought is affecting Peru, which will result in less rice
production. Post has revised rice production in CY2004 to 1.15 MMT, a 28
percent reduction compared to 2003. Though the planted area for the 2004
crop was only 6.9 percent less than the planted area in 2003, Post
estimates that the harvested area in 2004 will be 240,000 hectares, 26
percent lower than in 2003. The reduction in harvested area is the
result of the drought affecting the crop when it was already on the
ground.

Rice imports in 2004 are now estimated around 150,000 MT. The
government, through the Ministry of Agriculture, is encouraging rice
production in the oriental slopes of the Andes to overcome this rice
shortage, but rice imports will still increase significantly for the
first time in almost eight years. Imports will most likely begin
increasing in August and continue through the end of the year.

Peru's record imports were in 1996 when imported 430,000 MT. Uruguay and
the U.S have usually shared the Peruvian rice market. Since 1997, Peru's
rice production began increasing rather rapidly causing imports to fall
as low as 15,000 MT in 2003. U.S. rice exports to Peru also shrunk in
the last six years to a point that they became almost non-existent in
2003, leaving the market exclusively to Uruguay. Most imported rice in
Peru is targeted to the high-end market and sold packed in one-kilogram
bags. In this sector, U.S. rice has usually been very competitive both
in quality and price.