Food Basics: Business and Vulnerabilities

Due to the high geographic concentration of global production, Central America has increased its imports, but at the same time has become more vulnerable to crop losses, rising international prices and possible disruptions in supply chains.

Wednesday, December 16, 2020

The importance of the market for this type of food is that rice, wheat, corn, beans and soybeans are basic foods on which the world's population largely depends, since it is estimated that almost half of the calories consumed by people come from these foods.

You may be interested in "Imported Corn Vs. Local Sorghum"

The Central American market in recent years has increased its dependence on imports, since in some cases local production is not enough to satisfy local demand and in others imported food is cheaper than that harvested in the countries of the region.

Martesfinanciero.com review that "... In order to get an idea, the Government of Panama authorized the import of around 105 thousand tons of paddy rice in March 2020 to guarantee the supply until August. And its dependence on corn is even greater, since Panama imports around half a million tons a year, almost all of it for animal feed."

The article adds that "... Costa Rica, where it is estimated that around 60% of the rice consumed in the country must be imported, authorized the entry of 50 thousand tons in April. Nicaragua needs to import around 25% of its annual rice consumption. Beyond one country in particular, the dependence of wheat imports in the region is total since it is not produced due to its tropical geography."

Corn is an example that imports are growing considerably. Reports from CentralAmericaData detail that from January to June 2020, companies in the region bought corn abroad for $525 million, 20% more than what was reported for the same period in 2019, a variation that is explained by the increase in imports from all Central American markets.

There are threats in the basic food market, because according to specialists in the subject, price volatility due to crop losses in one or multiple global granaries and the disruption of the logistics chain, are factors that leave the region in a vulnerable position.



More on this topic

Basic Grains: Local Production Vs. Imports

October 2020

Although the volume of corn, beans, and rice harvested is projected to increase in El Salvador by 2020, producers' expectations are not encouraging, since prices have fallen to levels insufficient to cover costs due to the import of basic grains.

Forecasts by the Ministry of Agriculture and Livestock (MAG) indicate that this year the country's corn harvest will grow by 11%, beans by 30% and rice by 20%.

Guatemala to Import Duty Free Grains

November 2017

Authorization has been given for 2018 to importy duty free a maximum of 5 thousand MT of black beans, 150 thousand MT of yellow corn, 50 thousand MT of white corn and 26 thousand MT of paddy rice.

The approved quotas were: Black beans, a maximum of 5 thousand metric tons -MT-, equivalent to 110 thousand hundredweight; yellow corn, 150 thousand -MT-, equivalent to 3.3 million hundredweight; white corn, 50 thousand -MT-, 110 thousand hundredweight and unhusked rice, 26 thousand MT, 572 thousand hundredweight.

Nicaragua to Import More Grains Duty Free

August 2014

Due to a reduction of local production because of drought, the government has authorized, for the second half of the year, an increase in tax-free imports of red beans, rice and corn.

In the case of red beans, an additional 10,000 tons has been approved on top of the 20,000 authorized in June, while for rice the quantities will be defined in the coming days.

Costa Rica: Nontariff Barriers for Beans

May 2014

Businessmen are complaining about a shortage of the grain in the market due to stricter phytosanitary measures designed to prevent the entry of beans with soil residues on them.

The National Chamber of Industrial Crops (CANINGRA) and the National Association of Bean Industrialists (ANIFRI) have separately warned that there could be supply shortages in the short term if the measure preventing the entry of products with soil residues coming into the country remains. In February and May the entry about 2,000 tons of red beans from Nicaragua was prevented for having breached this rule.

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