Chia Seed Yields Decline Due to Drought in South America

Chia Seed Yields Affected by Drought in South America

In South America, chia seed production is experiencing a decline in yields due to a significant lack of rainfall in the growing regions. This scarcity of water has led to lower productivity, impacting the overall supply chain and market dynamics. While initially prices were on a downward trend during the early summer period, they have now started to increase as a result of the challenging growing conditions.

According to insights provided by experts at Chelmer Foods in their recent report in collaboration with Ponto International, the price fluctuations are not solely driven by demand dynamics. Despite relatively low buying interest expected to persist throughout the summer season, the reduced yields in countries like Paraguay have exerted upward pressure on prices. In June, buyers could afford to wait, but the current situation necessitates immediate action from suppliers to meet customer demands, further exacerbated by escalating freight costs influencing export prices.

Initially, the outlook for chia seed production in Paraguay seemed optimistic, with growers cultivating an estimated 150,000-180,000 hectares of chia seeds. This positive sentiment led to a decrease in prices in May and June. However, adverse weather conditions characterized by high temperatures and insufficient rainfall have led to a drastic reduction in yields in the primary cultivation areas. Compared to previous years where yields reached up to 700 kg per hectare, some regions are now only yielding as low as 200 kg per hectare.

The unexpected yield decline has caught farmers and exporters off guard, resulting in a surge in farmgate prices. Despite these challenges, there is a more favorable outlook in the southern regions of Paraguay, where the total crop volume is anticipated to surpass last year’s figures. The final assessment of yields is scheduled for September/October, providing a clearer picture of the overall production scenario.

Similarly, Bolivia has faced a similar predicament with inadequate rainfall impacting production despite an expansion in acreage to 30,000 hectares. Domestic production is expected to fall short at around 10,000-11,000 metric tons, necessitating imports from Paraguay to meet demand. In Argentina, although the chia seed cultivation area was slightly reduced this year, favorable weather conditions initially supported plant development. However, a late-season drought coupled with cooler temperatures led to a decline in yields, resulting in an estimated total production of 4,500-5,000 metric tons.

The ongoing challenges in South American chia seed production underscore the vulnerability of agricultural supply chains to climatic variations and highlight the importance of sustainable farming practices to mitigate such risks in the future. As the situation continues to evolve, stakeholders across the industry are closely monitoring developments to assess the long-term impact on global chia seed markets.