Planting for the 2025 'zafriña' main season corn crop, which accounts for approximately 80% of annual production, was completed last March, with harvesting expected to begin in May. Despite a rebound from the low planting area in 2024, the planted area for 2025 is estimated to be below the average, despite strong export demand in the first quarter of 2025. Prolonged drought and high temperatures experienced in the main corn-growing regions of Alto Paraná, Itapúa, Caaguazú, and Canindeyú during January and February 2025 delayed planting operations and hindered the early growth stages of the crop. Although abundant rainfall in the second half of March partially alleviated soil moisture deficits, weather forecasts predict below-average rainfall in May, the late growth stage of the crop, which is likely to negatively impact yields.
The harvest of the 2025 small-scale corn crop was completed last January, and production is expected to be below the five-year average. Low export demand in the second half of 2024 dampened farmers' planting intentions, resulting in a below-average planted area. Adverse weather conditions in the eastern regions, the main production area, between September and November 2024 coincided with the crop's growth stages, reducing yields.
2025 Rice Production Expected to Be Close to Average Levels
Planting for the 2025 wheat crop began in April. The planted area is expected to be above average due to increased planting by farmers in response to high import demand at the beginning of the year. Weather forecasts predict average rainfall between June and July, which corresponds to the flowering and grain-filling stages, creating favorable conditions for crop growth.
The 2025 rice harvest is underway and is expected to be completed in May. Higher prices compared to the previous year and strong import demand during the October-December 2024 planting period supported farmers' planting decisions, and the planted area is estimated to be above the five-year average. However, prolonged drought in the southeastern regions, the main production area, during the first quarter of 2025 delayed planting operations and negatively affected crop germination and early development. Overall, the 2025 rice production is expected to be close to the average level.
2024/25 Grain Exports Expected to Decrease by 20% Compared to Average
Grain exports for the 2024/25 marketing year (July-June) are projected to reach 3.3 million tons, approximately 20% lower than the previous five-year average and significantly below the record high levels of 2022 and 2023. This decline is mainly attributed to the reduced 2024 production of corn, Paraguay's main export grain. Corn exports are forecast at around 2 million tons, about 30% lower than the five-year average. In contrast, wheat exports are expected to be above average at 600,000 tons due to a good harvest in 2024.
Corn and Rice Prices Increased Year-on-Year Due to Poor 2024 Harvests
Yellow corn prices experienced a slight increase in February and March 2025 as downward pressure from the conclusion of the small-scale crop harvest was offset by concerns about the dry impact on ongoing main season planting. Corn prices remained somewhat higher year-on-year due to below-average low production in 2024. Rice prices fell month-on-month in March as market supplies improved with the start of the 2025 harvest, but they were still about 23% higher year-on-year due to the below-average harvest in 2023.
Overall, food prices in March increased year-on-year, and the annual inflation rate for food items is estimated at 6.4%, marking the third consecutive monthly increase.
Paraguay, a landlocked country in South America, relies heavily on agriculture as a crucial pillar of its national economy. In particular, the production of grains such as soybeans, corn, rice, and wheat contributes significantly to both domestic food security and economic growth as major export commodities. Paraguayan agriculture is sensitive to climate change, and the droughts and extreme heat experienced in recent years have significantly impacted crop production.
Corn is one of the most important grains in Paraguay, with a high proportion exported to neighboring countries such as Brazil, in addition to domestic consumption. The 'zafriña' crop accounts for the majority of Paraguay's corn production, and poor yields during this season have a significant impact on overall corn production. As the report indicates, the reduced planting area for the 2025 main season corn crop and adverse weather conditions during the growing period are likely to lead to lower corn production, potentially causing domestic market price increases and reduced exports.
Rice is a staple food crop in Paraguay, and production has been on an upward trend in recent years. While the 2025 rice production is expected to be close to the average level, the impact of drought during the early growth stages adds uncertainty to yields. Rising rice prices could negatively affect food access for low-income groups, necessitating government efforts to stabilize prices.
Wheat is a major imported grain for Paraguay, but domestic production has been gradually increasing due to rising international wheat prices and increased domestic demand. The increased planting area for the 2025 wheat crop reflects this trend and is expected to contribute to a stable domestic wheat supply.
The decline in grain exports could negatively impact the Paraguayan economy. In particular, reduced corn exports could lead to lower farm incomes and decreased foreign exchange earnings. The government needs to strengthen the competitiveness of the agricultural sector through technical support for improving agricultural productivity, expansion of irrigation facilities, and development of climate-resilient varieties.
Rising food prices can be a major driver of domestic inflation, particularly affecting the livelihoods of low-income groups. The government should implement various policy measures to stabilize food prices, such as securing buffer stocks, diversifying import sources, and improving the distribution structure. Additionally, it is necessary to expand food support programs for vulnerable groups to ensure food access.
The Paraguayan government is making multifaceted efforts to strengthen food security. It is focusing on increasing productivity and enhancing resilience to climate change by expanding investment in agricultural modernization, strengthening agricultural technology education, and diversifying crop cultivation. Furthermore, it is actively pursuing international cooperation by sharing information related to food security and receiving technical assistance through collaboration with international organizations.
Paraguay is expected to face food security challenges in 2025 due to reduced corn production caused by drought and the resulting sluggish grain exports. Rising rice prices could also pose a potential threat to domestic food security. The Paraguayan government will need to actively address these challenges through comprehensive policy efforts, including improving agricultural productivity, stabilizing prices, and supporting vulnerable groups. In the long term, strengthening the agricultural sector's resilience to climate change and establishing a sustainable agricultural system will be crucial tasks for ensuring Paraguay's food security.
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