Next Door to Argentina, But Bolivia Buys U.S. Wheat

Posted August 18, 2015

Bolivia shares more than a border with Argentina, thanks to favorable trade policies that encourage Bolivia to import wheat from next door Argentina. However, U.S. wheat farmers stepped up to meet demand in this growing Latin American market when Argentina’s poor production and political policies left their neighbor in need.

Bolivian farmers do grow wheat – between 5.51 and 7.35 million bushels (15,000 and 200,000 MT) annually. These highly erratic supplies, however, are milled and consumed near where it is grown – leaving the rest of the country dependent on imported wheat and flour to meet annual average consumption of 29.39 million bushels (800,000 MT). With close geographic proximity and duty free imports under the Mercosur agreement, Argentina is typically the top wheat supplier for Bolivian mills.

In December 2012, however, the Argentine government announced it would significantly cut wheat exports following two poor crops. U.S. Wheat Associates (USW), the voice for Kansas wheat farmers in international markets, sent staff from the USW office in Santiago, Chile, to offer assistance. Together, USW provided millers with the information they needed to convince the Bolivian government to lift the 10 percent import tariff on wheat for countries outside the Mercosur agreement – like the United States.

As a result, the Bolivian government agency EMAPA, the Support for Food Production Company, purchased all of their wheat needs for 2013 and 2014 from the United States. In total, an estimated 13.2 million bushels (360,000 MT) of hard red winter (HRW) wheat was shipped from the Gulf of Mexico to Bolivia.

The positive feedback from Bolivian bakers on this wheat’s quality may signal more purchases of U.S. HRW in the future. While Bolivia is one of the poorest and least developed countries in Latin America, the country had the fastest growing economy in the region in 2014, according to the International Monetary Fund. As a result, the Bolivian people are shifting from rural to urban life. Combined with strong population growth and increased purchasing power, that means Bolivian consumers are demanding more diverse and better quality foods.

Bolivian millers now know the best wheat to meet that demand may be located a little further away than next door. Even better, they are reassured they will always be able to purchase the wheat they need from reliable farmers up the road in the United States.

by Julia Debes