Homepage  Homepage     Search on site  Search on site     To write the letter  To write the letter     Site map  Site map
Agro Perspectiva
We are on: 
   
 


Home > News

Prospects for U.S. Corn in Latin America

09.10.2020 15:30 "Agro Perspectiva" (Kyiv) — According to the International Agricultural Trade Report of the USDA, Latin America accounts for about 25 percent of global corn imports1. The region’s corn demand for imported corn has grown steadily over the years supported by expansion in the livestock sector, particularly poultry production. Demand for animal protein has grown with improved economic conditions and greater disposable incomes. Corn trade in the region for the first half of 2020 has been steady with little impact from COVID-19. The United States has been the top supplier benefitting from Latin America’s growth in imports. However, imports of U.S. corn have been trailing off, driven by changes in the key markets of Colombia, Peru, and Mexico.

U.S. prices hit a 5-year high in the spring of 2019, caused by unprecedented planting delays due to wet weather. Uncertainty over the crop size kept prices elevated into the summer, eroding the competitiveness of U.S. corn in foreign markets. Flooding of the Mississippi River added logistical challenges and limited barge traffic to the Gulf terminals. Concerns over quality in the 2019 crop (i.e., low test weight and broken/damaged kernels) may have also contributed to smaller exports. Colombia and Peru turned to Argentina, which had been their major supplier of the past, while Mexico also sought to diversify suppliers.

Colombia and Peru: Key Markets in South America

Under the U.S-Colombia Trade Promotion Agreement, U.S. corn is subject to tariff-rate quotas (TRQs). Combined quotas for yellow and white corn are 3.3 million tons for 2020. Within the quotas, U.S. corn is duty free. Over the quotas, U.S. corn is subject to a tariff that declines annually to reach zero in 20232. Corn from other origins (i.e. MERCOSUR) is subject to a 25-percent duty plus a variable levy under the price band system when imports are priced lower than domestic corn. U.S. corn is exempted from the price band.

As the TRQs are managed on a first-come, first-served basis, importers have returned to U.S. corn and already filled the quotas in the first six months of 2020. Colombia depends on corn imports as local production remains small. Local production supplies only about 20 percent of annual consumption. Imports are driven by growing demand for feed in poultry and swine production. In recent years, food demand has grown relatively faster reflecting an influx of immigrants from Venezuela.

The corn-related provisions of the U.S.-Peru Trade Promotion Agreement were fully phased in on January 1, 2020, and U.S. corn now enters Peru duty free and quota free. Peru assesses no duty on corn imports from non-U.S. origins, but they are subject to a variable levy under Peru’s price band system when imports are priced lower than domestic corn.

Peru’s countervailing duty (CVD) investigation on U.S. corn during 2018–2019 partly coincided with a period of strong U.S. prices and led to a reduced U.S. market share. While the CVD threat ended in January 2020 without resulting in a punitive tariff, a lower variable levy has boosted the competitiveness of non-U.S. corn3. Peru depends on imports because its production accounts for barely a third of annual consumption. Locally grown corn is mostly used in the food industry, while imports are used to satisfy feed demand from Peru’s expanding poultry sector.

Mexico: Top Destination for U. S. Corn

Mexico is the top destination for U.S. yellow corn, which is primarily used for animal feed. Locally produced white corn is mostly used for food. Infrastructure developed since the North America Free Trade Agreement has greatly enhanced the competitiveness of U.S. corn over its South American suppliers. U.S. corn has entered Mexico duty free since 2008 and that will continue under the United States-Mexico-Canada Agreement.

About 60 percent of U.S. corn enters by truck and rail, while shipments from South America travel longer distances by water and, upon arrival, incur further costs to travel inland. With transportation advantages, the United States has supplied essentially all of Mexico’s import needs. While Mexico makes occasional efforts to diversify its suppliers, market forces limit the practicality of that approach.

U. S. Export Prospects Bright

Moving into 2020/21, the United States is currently forecast to have the second-largest corn crop on record, and exports are forecast up 23 percent (about 11 million tons) from a year ago. U.S. corn is expected to be competitive due to large available supplies and reduced competition from other exporters, namely Argentina, Brazil, and Ukraine.

The export growth in those countries is forecast to be limited due to smaller available supplies (Argentina and Ukraine) and strong domestic prices (Brazil). For Brazil, strong demand for meat exports to China has stimulated expansion in beef, pork, and chicken production. This development is expected to boost demand for corn in Brazil’s domestic market and to moderate the volume available for export.

With preferential terms and less expected competition, U.S. corn should be able to regain market share in Latin America in the coming year.

Agro Perspectiva

< World Bank predicts Ukraine's GDP fall by 5.5% in 2020 with 1.5% growth in 2021 All news for
09.10.2020
Inflation in Ukraine grows by 0.5%, falls to 2.3% year-over-year in Sept – statistics >

18.03.2024  
23:10 The European Union and Switzerland launch negotiations to deepen bilateral relations
10:05 Commission proposes targeted review of Common Agricultural Policy to support EU farmers
15.03.2024  
23:36 Cargill Power CanolaTM Program Helps Farmers Take Advantage of Growing Bioenergy Market Opportunities for Canadian Canola
23:19 FAO will provide Ukrainian farmers with soybean and sunflower seeds for spring sowing campaign
13.03.2024  
23:27 FAO urges more cooperation in banana sector, significant for some least developed and low-income food-deficit countries and smallholder farmers
16:51 The European Commission sets out key steps for managing climate risks to protect people and prosperity
12.03.2024  
20:25 Coreper and COMENVI approve the provisional agreement on EU Carbon Removal Certification Framework
20:24 INTA MEPs fail EU producers by dismissing potential improvements to Ukraine ATMs
08:10 Soybean meal is expected to be a more competitive feed ingredient on higher global supplies.
11.03.2024  
09:11 U.S. Corn Exports Shift Destinations as Brazil Captures China Market
08.03.2024  
15:20 Conflicts push acute food insecurity higher
13:21 FAO Food Price Index declines further in February
13:14 Packaging: Council and Parliament strike a deal to make packaging more sustainable and reduce packaging waste in the EU
11:45 Commission approves ˆ61.3 million Bulgarian State aid scheme to support farmers, producers of grain and oil crops, in the context of Russia's war against Ukraine
07.03.2024  
20:41 First go-ahead to renewing trade support for Ukraine and Moldova
05.03.2024  
15:55 Commission proposes to prolong road transport agreements with Ukraine and Moldova and introduces updates to the agreement with Ukraine
02.03.2024  
07:31 Heroes of deserts and highlands: Nourishing people and culture
23.02.2024  
10:21 BASF’s financial strength supports proposed stable dividend of ˆ3.40 per share for the 2023 business year
10:17 The Council has chosen to ignore farmers' concerns regarding Ukraine ATMs; it is now imperative for the European Parliament to take action
20.02.2024  
20:27 South Asia is anticipated to import nearly 14 million tons wheat in 2023/24
19.02.2024  
13:00 Cargill and ENOUGH expand partnership to provide consumers with innovative, sustainable protein options
17.02.2024  
17:47 Global Environment Facility approves new FAO-led projects and programs benefiting 46 countries
16.02.2024  
09:10 The EU is at a crossroads with the Ukrainian agricultural issue - COPA-COGECA, AVES, CEFS, CEPM, CIBE, EUWEP
13.02.2024  
17:31 European farmers exempted from rules on land lying fallow
12.02.2024  
16:45 India Wheat Stocks Plummet to Lowest in 15 Years
03.02.2024  
17:35 Mandarins. Global production for 2023/24 is forecast to rise to 38.0 million tons
09:59 Record cereal output in 2023
07:15 FAO Food Price Index down again in January led by lower wheat and maize prices
29.01.2024  
10:32 President von der Leyen launches Strategic Dialogue on the Future of EU Agriculture
26.01.2024  
11:31 Record Exports Forecast for Egypt Oranges
23.01.2024  
17:55 With the Federal Chancellor in the show bakery
19.01.2024  
11:45 Organic production in Ukraine
16.01.2024  
23:25 Domestic consumption of dairy products may double in 2024 – analysts
12.01.2024  
23:53 Competition Tightens for Leading Pork Exporter
22:55 Peru Fish Meal Exports at Lowest Level Since 2015/16 El Niño
22:43 Grains Trade Disrupted by Challenges in Key Shipping Routes
10.01.2024  
15:38 In China, the largest import market for dairy products, surplus raw milk production led to government subsidies to stabilize the domestic processing sector
09.01.2024  
11:55 The FAO Sugar Price Index averaged 134.6 points in December, down 26.8 points from November
06.01.2024  
12:43 Polish fish and seafood imports continued to grow in 2022 and reached over $3 billion, with a $129 million (4 percent market share) originating from the USA
05.01.2024  
17:21 EU imports are dominated by unroasted green coffee beans, which accounts for about 90 percent of trade
17:00 FAO Food Price Index declines in December. Benchmark measure of world food commodity prices ends 2023 about 10 percent below its year-earlier level
29.12.2023  
09:53 Global and Bank of Georgia sign EUR50 million loan agreement to support small businesses
28.12.2023  
16:47 EIB delivers EUR3 million for energy-efficient upgrades in three Ukrainian cities
27.12.2023  
23:11 EU agri-food trade surplus increases in September 2023
26.12.2023  
15:05 FAO and EU launch a second grant call to bolster the recovery of Ukrainian farmers
18.12.2023  
09:00 EIB Global offers support to Ukraine, Moldova and Georgia on the next step of their EU accession paths
11.12.2023  
13:21 FAO Food Price Index holds steady in November
09.12.2023  
22:15 Donau Soja: Republic of Moldova increases soya harvest in 2023 and boosts market opportunities in the EU
24.11.2023  
12:25 SUGAR MARKET BY SESVANDERHAVE
09:32 BASF signs CNY 40 billion syndicated bank term loan facility with maturity of 15 years for its Verbund site in Zhanjiang, China

Also available: 


NewsNews - News - News - News - News - News
BriefWeekly Reports - Free article
SubscriptionTariff - News&Reports
AdvertisingMagazine - Site
ConferencesForum AGRO-2013 - DAIRY WORLD-2008 - FERTILIZERS-2010
Statistics
For our clientsAgroNewsDaily - Ukrainian Grain&Oilseed Market - Fertilizers - Milk Monthly - Milk Weekly
About usAbout project - Contact
2002 -2024 © Agrarika, ltd.
tel.: +380 67 4473802; +380 67 5964652
e-mail: client@agroperspectiva.com