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 > 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 regions 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 Americas 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 Perus price band system when imports are priced lower than domestic corn.

Perus 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 Perus 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 Mexicos 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 Brazils 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 >

18.09.2023  
13:55 Ukraine will sue Poland, Hungary and Slovakia over agricultural bans
15.09.2023  
21:02 Following the expiry of the restrictive measures on Ukrainian exports of grain and other foodstuff to the EU, Ukraine agrees to introduce measures to avoid a renewed surge in EU imports
13.09.2023  
17:54 Biodel AG Secures Series A Investment from Pangaea Ventures to Advance Novel Regenerative Agriculture Technologies
07:25 Rice Export Prices Highest in 15 Years as India Restricts Trade
11.09.2023  
17:54 Export Bans, Black Sea Tensions, Affecting Food Markets - WTO Agriculture and Commodities Division
09.09.2023  
18:36 Global cereal production forecast to match past record - FAO
14.08.2023  
13:22 EBRD provides EUR60 million guarantee to support lending by Ukraines PrivatBank
13:18 Supporting small business in the west of Ukraine via Bank Lviv
12.08.2023  
18:35 Russia Withdraws from Black Sea Grain Initiative
04.08.2023  
19:32 Falling international maize and sugar prices partly offset notable jumps in wheat and vegetable oil quotations
28.07.2023  
19:25 Cargill and partners announce first Gold Standard-approved methane emissions reduction methodology for beef producers
19:21 FAO welcomes European Union contribution of 25 million to advance wildlife conservation and food security
18:55 BASFs earnings in tough market environment significantly below strong prior-year quarter
24.07.2023  
00:45 Brazil continues to make export gains and set new records for beef, pork, and chicken meat
23.07.2023  
22:25 122 million more people pushed into hunger since 2019 due to multiple crises, reveals UN report
22.07.2023  
08:17 U.S. dairy exports to Southeast Asia have been weak to start 2023
13.07.2023  
07:00 Russia Exports Record Wheat Volumes; Ukraine Exports Plummet
08.07.2023  
09:00 FAO Food Price Index continued declining in June
06.07.2023  
20:10 Global agricultural and food production are projected to continue to increase over the next ten years
04.07.2023  
19:54 EBRD supports Ukrainian city of Dnipro with EUR25 million loan
09:03 Nibulon invests EUR 27 mln in construction of granary, flour mill in Izmail
23.06.2023  
08:57 World coffee production for 2023/24 is forecast 4.3 million bags higher than the previous year to 174.3 million
08:55 Mexicos Production Recovering from Coffee Leaf Rust
22.06.2023  
04:05 EBRD and Ukraine government to mobilise 600 million for Ukraine energy security
21.06.2023  
20:26 EBRD and Ukraine government to mobilise EUR600 million for Ukraine energy security
11.06.2023  
15:55 Argentina ramps up soybean imports from Paraguay and Brazil
10.06.2023  
04:35 World Oceans Day must be Humans Day: FAO Fisheries chief
09.06.2023  
11:24 EU extends trade benefits for Ukraine
05.06.2023  
11:25 2023/24 Grain Production Exceeds Consumption
02.06.2023  
11:45 Rebound seen for global cereal output, with worldwide stocks set to hit record levels
11:35 Significant drops in international quotations for wheat, maize, vegetable oils and cheese, while prices of rice, sugar and meat rise
01.06.2023  
11:56 Conflict Drives Acute Hunger in the Democratic Republic of Congo - UN agencies warn
31.05.2023  
12:29 Three New Foods and Their Applicable Food Safety Standards
30.05.2023  
11:55 Haiti: Nearly half of the population is facing acute hunger
11:34 Increasing risk of hunger set to spread in hotspot areas as the Sudan crisis spills over into subregion and el Niño looms - warns new UN report
28.05.2023  
12:51 Black Sea Grain Initiative not fully resumed UN
25.05.2023  
15:52 Ukrainian FM urges African Union to demand that Russia stop obstructing work of grain corridor
20.05.2023  
11:49 Grain initiative talks continue considering proposal of UN Secretary General Dpty Minister of Restoration
05.05.2023  
14:45 The FAO Food Price Index rebounded slightly in April
28.04.2023  
09:15 Yara . 1Q results impacted by falling prices, but tighter nitrogen market into 2Q
21.04.2023  
22:10 Ukraine sees no reason to ban Ukrainian grain imports by EU countries - Solsky
18.04.2023  
21:45 $5 million from FAO-China South-South Cooperation Programme will assist in building more resilient agrifood systems
21:05 China Becomes Worlds Largest Wheat Importer in 2022/23
14.04.2023  
09:52 EBRD and Spain join forces to support Ukraines food security and municipal sector
05.04.2023  
13:10 Astarta starts 2023 planting season
31.03.2023  
00:27 War in Ukraine continues to impact EU farmers
28.03.2023  
22:17 Ukraine sends 150,000 tonnes of wheat to Asia
12:00 Global onion prices are at record-high levels due to a global shortage of onions
12.03.2023  
06:17 It will enrich Egypt if a kilo of onions costs HUF 1,000
10.03.2023  
11:03 Plummeting Argentina Soybean Production Impacts Global Soybean and Products Trade

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 -2023 © Agrarika, ltd.
tel.: +380 67 4473802; +380 67 5964652
e-mail: client@agroperspectiva.com