Prices Soar As Maca Roots Are Smuggled Out Of Peru

Update 2016: The supply of Peruvian Maca for 2015-2016 seems to have stabilized for the moment and prices are starting to come back down. We've already been able to lower our prices to customers once and expect to be able to do so again by summer 2016. That said, there is now quite a bit of subpar Chineses grown Maca on the world market. It doesn't work nearly as well as Peruvian Maca and may actually be dangerous. Here is why to always insist on Peruvian grown Maca.

Troubling Times For The Global Maca Market

In early July 2014 as we prepared to purchase some freshly harvested Maca from our farming co-operative in Peru we were greeted with some troubling news. Our supplier told us that the price of Maca was rising quickly due to unprecedented demand from Asian and, in particular, Chinese buyers. We quickly became aware of the extent of this new demand when we were quoted prices nearly double the previous market price. At that time we submitted our purchase order at the new prices. Shockingly a message came back to us a few days later that the prices had doubled yet again and would likely continue to rise. Thanks to our deep connections with various Maca suppliers in Peru and the U.S. we discovered that everyone in the Maca trade is experiencing prices 4 and 5 times higher than normal. Here’s part of an email we received from one of our suppliers a couple weeks ago:

Unfortunately maca situation maintains and we don’t have maca back in stock or to be delivered. Currently maca price on farms are still increasing and now they are 100% more than 2 weeks ago

And another:

Prices are going up almost every week due to the high demand from the Chinese

Since our only focus is Organic Peruvian Maca we had to find out what is happening.

What’s Causing Maca Prices to Go So High This Year?

We’ve discovered that Chinese nationals are coming into Peru posing as tourists. They approach Maca farmers directly in their fields with suitcases full of cash and offer them 4-8 times market rate for their products. The farmers have been taking the money, even when it means breaking contracts they have had with Peruvian national producers who have supported them for decades. It’s certainly easy to question the ethics of this tactic, but the Chinese are going even further by illegally smuggling whole Maca roots and seeds out of the country. Here’s how one of our contacts in Peru put it a couple of days ago:

Maca is not allowed by our government to be exported as raw material (fresh product without being processed) because it can be used as a seed in other countries, and this is a product considered to be native to Peru and our government tries to maintain it as such. However, the Chinese are taking the product fresh out of our country illegally through our country’s borders with Bolivia and Ecuador. This problem was shown on national TV yesterday. Our government is increasing control, and I hope they manage to be successful and stop the Chinese from doing this

This issue, considered by many as an act of Bio-terrorism, is making international news headlines. To date these are the main articles addressing the situation. (Note that the prices quoted in these articles are already outdated). Notice that major news outlets including the Wall Street Journal and the New York Times are now also reporting on this situation.

• Maca peruana es cultivada ilegalmente en China (La Repubilca, Peru) - 14 June 2014
• ÁDEX denunció a China por biopiratería de semillas de maca (El Comercio Peru) - 23 June 2014
• Alleged Smuggling of Peruvian Maca Planting Stock To China (Internatoinal Trade Center) - 28 July 2014
• Buying Fever Grips Peru's Maca Trade (Fox News) - 6 August 2014
• Thousands of Tons of Maca Smuggled Out of Peru (Fox News Latino) - 18 August 2014
• Tres ministros irán al Congreso por contrabando de maca a China (El comercio, Peru) - 19 August 2014
• Alleged smuggling of Peruvian maca planting stock to China (International Trade Center) - 28 July 2014
• Mincetur propone crear ProMaca para proteger producto peruano (El comercio, Peru) 2 September 2014
• Perú ha expulsado a 200 extranjeros ilegales en las últimas tres semanas (Gestion) - 6 October 2014
• Hijacked Harvest: Peruvian Maca in Peril (Modern Farmer) - 13 October 2014
• Contrabando de maca: la noticia ha dado la vuelta al mundo (Proexpansion, Peru) - 14 October 2014
• A Peruvian National Treasure is Being Smuggled Out Of The Country (ABC Australia) - 30 October 2014
• Huge influx of Chinese capital coupled with threat of violence seriously destabilizes maca trade in Peru, expert says (Nutraingredients USA) - 13 November 2014
• The Latest Superfood? Peru's Maca Root. Prices Leap.... (Wall Street Journal) 3 December 2014
• China Buyers Go Crazy For Peru's Maca Root (Wall Street Journal Online) 3 December 2014
• Vegetable Spawns Larceny and Luxury in Peru (New York Times) 6 December 2014
• Maca Madness: Chinese Herb Smugglers Create Chaos in the Peruvian Andes (American Botanical Council) - 11 December 2014 - This is the most complete article to date...

In addition AmericaTV released an informative video detailing the situation on 17 August 2014. Here’s the link to the Spanish only verision.

And here is the video with English subtitles. It's very well done and worth watching for sure.

So Why Do The Chinese Want So Much Peruvian Maca?

We’ve been asking ourselves the same question, especially since we know that China is actively growing Maca in the Yunnan region. According to one of our customers and affiliates in China the harvest of Chinese Maca from Yunnan is set to be very large this year. But Chinese consumers prefer Peruvian Maca because of its much higher quality (see our article on why you should insist on Peruvian grown Maca here). They also demand whole roots because they are concerned that Chinese companies will adulterate or cut” Organic Peruvian Maca powder with other types of flours. Beyond that it seems likely that Chinese companies are planning to plant some of the whole roots from Peru in order to try to grow a better quality Maca in Yunnan,

What These Maca Price Increases Mean For Us and Our Customers

The short term outlook: Fortunately, we are still able to source our Maca from the same great co-op we always use. It’s just at a MUCH higher price. That means our customers saw our first price increase in over 4 years as of September 1st 2014. We simply could not avoid that.

However, since we always buy our Maca in small lots to maximize freshness we continually monitor pricing. Hopefully, as this situation plays out, our costs will come down and we will be able to lower prices again.

The longer term outlook: Most experts we’ve spoken with predict that Maca pricing will stabilize within a few months. We certainly hope that it does. We also hope that the Peruvian government is successful in preventing the export of whole roots from their country as it is indeed a national heritage crop of Peru.

Update as of September 2014: Little has been done to stop the mass export of Maca from Peru, unfortunately. Our suppliers indicate that the current harvest will be totally gone by year's end. The next harvest will not begin until May/June 2015. We are currently purchasing as much as we possibly can and hope to be able to continue to serve our customers with high quality Maca throughout the year.

Update as of October 2014: Not surprisingly we are now receiving offers from Chinese companies to purchase Chinese grown Maca. Just as we suspected, part of the strategy seems to be for the Chinese to take over the global market for Maca. We will NEVER purchase Chinese grown Maca, both because of quality and ethical reasons. If you love Maca make sure always insist on Peruvian grown. Here's an example of one of the offers:

A Few Final Words

Thank you for reading and sharing this message with anyone who cares about high quality heritage foods. It’s because of people like you that we are in business. We appreciate it very much. We will keep this page updated with new developments.

 

Updates:

• 21 August - Three Government ministries in Peru, Trade, Tourism and Agriculture, have announced that they will be taking action against the illegal exprot of Maca. Article in Spanish
• 22 August – We have heard from a Peruvian supplier of Maca that the government of Peru was able to stop and seize 150 tons of illegally purchased whole Maca roots on the border with Ecuador. This hasn’t been confirmed, but if it’s true, it’s certainly a step in the right direction.
• 23 August – According the the report linked the Chinese government is agreeing to monitor their borders for the arrival of contraband Maca roots. Let's hope this is true.
• 8 September - One of our Maca suppliers has told us that the Peruvian tax authorities were in the fields trying to track down some of thie illegal transactions. This however has not had much of an effect overall.
• 13 September - We've heard from one of the producers that we work with that little has been done to improve the situation and that by year's end all of the current Maca harvest in Peru will be gone.
• 30 September - We are now being contacted by people from China trying to sell us their Maca. We will never buy or sell Chinese grown Maca. Find out why.
• 2 October - We have been told by multiple suppliers that the 2014 harvest of Maca in Peru is all but gone. The roots are all out of the ground by now and very little of them remain in the country for sale. This happened so quickly!!
• 6 October - We've heard reports that some Chinese posing as tourists while buying Maca have been expelled from the country. Details...
• 10 November - We are now scraping to bottom of the barrel in terms of the 2014 harvest of Maca. What little that is left is coming at extremely high prices. We've been quoted as high as $80, but nothing less than $65 for Organic Maca this month. We are filling our warehouse as best we can in order to avoid any gaps in supply for our customers. That said we are also going to have to raise our prices again very soon.
• 10 December - fortunately we have secured enough high quality Maca to serve most of our customers through next May/June. That said the prices are still going up. Nearly $100 per KG in some cases. The Wall Street Journal just put out an article, so the attention to the siutation is getting even stronger.
• 12 December - We have launched our "Save Peruvian Maca Petition." It's in Spanish and English and we will submit it to Peru's Minister of Agriculture. Sign the Pettion Here.
• 1 April - In speaking with our suppliers of Maca in Peru, the situation has not changed all that much. Chinese companies are still in Peru gathering as much Maca as they can. Farmers have planted about 3 times the amount of land in Maca for the 2015 harvest so we are hopeful that by August we will have access to some of that harvest. Still the situation remains quite volatile.