Colombian corn imports from the United States will fall to 2.6 million tonnes in 2008/2009, a drop of 346,000 tonnes, due to the global economic slowdown, a US Agriculture Department attache in Bogota said in a report released on Friday. Attache reports are not official USDA data.
"Colombian corn imports from the United States are expected to decline by 346,000 tons in MY 2008/2009 to 2.6 million tons due to the economic slowdown, while wheat imports from the United States will increase slightly. Up to 75,000 tons of US paddy rice is expected enter under a tariff-rate-quota (TRQ) with zero duty after 5 years of no commercial rice imports from the United States.
Colombian policy support and duty protection remains in place with the objective of encouraging national grain production, however, high production costs still make locally produced grain prices higher relative to the price of imported grains. The floor and ceiling prices of the Andean Community price band system will significantly increase starting on April 1st, 2009.
This will put US grains at a greater disadvantage relative to Mercosur countries, which have started receiving higher import duty preferences under the Andean Community (CAN)-Mercosur trade agreement. The US-Colombian Trade Promotion Agreement (CTPA) provides for a TRQ of 2.1 million tons for US yellow corn, 136,500 tons for US white corn, and 79,000 tons for US rice to enter Colombia duty free. Wheat imports from the United States will receive immediate duty elimination upon implementation of the CTPA.
Production Colombian Corn production is expected to decline by 20,000 tons in 2008/2009 compared to 2007/2008, and is forecast to recover in 2009/2010 to reach 1.7 million tons.
Colombia suffered from higher than average rainfall in 2008, which caused a small reduction in planted area and in lower yields. Forty percent of the corn produced in Colombia is white corn for human consumption, while 1.0 million tons of yellow corn production goes into the feed industry. Corn production costs are still high relative to imported corn prices and the prospect for increased corn production in the short term is relatively small.
Under the "Secure Agriculture Income" (SAI) program, the government of Colombia (GOC) continues to support producers granting a US $20 per ton subsidy for corn produced and sold during 2009. If not for the government support, the reduction in planted area would have been much greater. In the long run, continued support from the government to stimulate mechanised corn production and the introduction of GMO seeds are helping to improve production.
Wheat production area in Colombia is expected to decline by 4,000 hectares in 2008/2009 setting production at 30,000 tons. This figure is projected to remain unchanged in 2009/2010. Reduction in planted area reflects the high costs of production that shifted small farm production and land uses to livestock and other more profitable crops.
According to Colombian wheat millers, which buy all the available locally produced wheat, the supply from Colombian growers located in the countrys southern production area has significantly decreased. Colombia, under the free trade agreement signed with the United States (CTPA), will immediately eliminate the duty on US wheat imports."