Imported Corn Vs. Local Sorghum

Because yellow corn is imported from the United States at a price of $11 per quintal in Nicaragua and the cost of producing a quintal of sorghum locally is $12.5, competition for local producers is nearly impossible.

Tuesday, December 15, 2020

Nicaragua is part of the Dominican Republic-Central America-United States Free Trade Agreement, an agreement that allows yellow corn from the United States to enter the local market free of tariffs.

Imported yellow corn was gradually reduced, with a 15% tax in 2006, 10% in 2015, and 0% in 2020.

With the elimination of tariffs, local sorghum producers assure that they cannot compete.

See "Fruits and Vegetables: Interest in the Region Declines"

Francisco Vargas, executive director of the National Association of Sorghum Producers (Anprosor), told that "... 'the tax-free entry for yellow corn has been the sorghum producers' nightmare, because this seed enters at a price per quintal of $11, while producing a quintal of sorghum is around $12.5, which leaves no margin to sell the great local at a lower price than corn brought from the U.S.'."

Sorghum and yellow corn compete in the animal feed market, since both products are demanded by cattle ranchers, pig farmers and the poultry industry.

Vargas added that "... producers in Europe and the U.S. receive more than 30% of production costs in subsidies, we do not receive any kind of subsidy and this year the government implemented tax rates on inputs and that makes the product more expensive. We cannot be competitive under that international market scheme that they impose on rich countries, which strongly finance their producers to have advantages in the markets."

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.

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