Quinoa Market Update - 25 March 2020

With the upcoming harvest set to commence in May, we are taking note of a variety of factors on the supply and demand side that will impact pricing. The global COVID crisis will play a part in the short-term market leading up to harvest and possibly beyond

Demand for Quinoa exports has remained steady over the past several years and we have not been anticipating a demand surge in 2020. Up until last week, sentiment has been production should closely match demand. However, with the recent trend of stockpiling groceries, we are seeing an increase in spot sales for short coverage and this could squeeze the annual supply a little tighter than originally expected

Recent pricing had remained within the range it was averaging in 2019 give or take USD$100/MT. With the very recent developments worldwide causing an increase in sales, we are starting to hear of spot sale pricing at a significant increase. As of now, our pricing has remained comparatively stable.

Also worth considering; Bolivia, one of the top Quinoa producing origins, is also landlocked, with no direct access to seaports. The flow of Quinoa out of Bolivia is likely to continue but could experience delays as we are now seeing regulations limiting activity throughout this region of the world. If ports were to be short-staffed & overburdened and Bolivian exports were to have a lower priority to ship, it would tighten supply availability substantially in the coming months. As long as COVID is ongoing, we can anticipate the crisis will drive up pricing, as all things point to additional tightness and strain on supply.

Possible Scenarios

Bullish

• There are almost no reasons for the market to go down unless the demand for Quinoa were to drop significantly. As a dry grocery item with substantial shelf life, Quinoa is likely to maintain or gain market share during this time.
• For Quinoa buyers, it’s an ideal time to secure some spot loads and ensure your coverage for potential demand the upcoming months before harvest. The availability of last year’s crop will become increasingly sparse if demand continues to grow.

Bearish

• With COVID affecting so many global economies, you can expect economies and spending to shrink and demand on many things going down. As a nutrient-rich dry grocery item with shelf stability, I believe the Quinoa is in a low-risk category for significant demand drop but is possible.