By the Blouin News Business staff

Peru, Bolivia in bitter dispute — over quinoa

by in Americas.

Quinoa at a market in Lima, Peru, on June 24, 2013CRIS . BOURONCLE/AFP/Getty Images

Quinoa at a market in Lima, Peru, on June 24, 2013. CRIS . BOURONCLE/AFP/Getty Images

On January 14th, Peru’s Minister of Agriculture and Irrigation announced that Peru had surpassed Bolivia to become the world’s top producer and exporter of quinoa, thus setting the stage for a deepening rivalryThis Andean seed (that is harvested like a grain) is a nutritious “superfood” and global demand for it has skyrocketed in recent years. Accordingly, prices increased eightfold over the five years to early 2014, and Peru dramatically escalated its cultivation of quinoa to capture some of the lucrative market.

A decade ago, Peru exported just 6% of global quinoa sales while Bolivia accounted for 90%. The rivalry between ascending Peru and steady-going Bolivia only emerged in 2013. In 2014, Peru’s output supposedly reached 104,000 tons, double that of 2013, according to the government, but the figures immediately caused controversy. Bolivia disputed the accuracy of Peru’s statistics, and maintained that it was still the leader, citing its own statistics. Now the governments and farmers’ trade organizations of both countries accuse their counterparts of lying and manipulating statistics.

But not all quinoa is created equally, nor does it fetch a single price. While Bolivian quinoa is organically farmed on a small scale, most of Peru’s quinoa is factory-farmed, using massive amounts of fertilizers and chemicals. Furthermore, geography favors Peru over land-locked Bolivia when it comes to quantity: whereas Bolivian quinoa grows in the altiplano, the high-altitude plateau in the southwest, and produces one harvest per year, most of Peru’s quinoa grows along the coastal region and produces two harvests per year.

Bolivia’s competitive advantage is with organic quinoa, which nets a far larger price (up to double) than the factory-farmed alternative. It has one singular comparative advantage though — the most-desired variety, “royal quinoa,” grows only in a certain part of Bolivia and cannot survive elsewhere. But the difference in taste is hard to distinguish, and one of Bolivia’s main fears is of Peruvian quinoa being smuggled into the country and illegally mixed with Bolivian quinoa, harming the quality and reputation that justifies the higher premium Bolivia gets.

Tensions have already come to a head once, when in November 2014 Bolivian officials seized 23 tons of Peruvian quinoa at a checkpoint near the border. As the Associated Press reported, they “dumped it into a ditch, soaked it with diesel fuel and burned it for TV crews —  an extreme measure in a country where nearly half the people are poor and roughly one in five toddlers suffers from malnutrition.”

Peru also has a small amount of organic quinoa farmers in its mountainous regions, and Bolivia fears that all of Peru’s output will drag prices down. Already, organic quinoa has fallen to around $6,000/ton from its peak of a little over $8,000/metric ton in early 2014, and non-organic quinoa sells for $1,500 less. The global slump in commodity prices may be the main cause for that, however. It’s important to note that this rivalry is blown way out of proportion to its economic reality, and now is more of a symbolic-populist cause mixed with farmers complaining about lower prices.

One cannot help but recall the “falafel and hummus war” in 2009-10 between Israel and Lebanon in which each nation outdid the other in cooking up the world’s largest batch of said food. For Bolivians and Peruvians, while being the top producer and exporter of quinoa may not bring an additional competitive advantage, national pride may be prize enough.