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.
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.
During last year, the country reported the production of 180,086 tons of rice, 20,652 tons of corn and 9,005 tons of beans.
According to the National Agricultural Survey 2017, carried out by the National Institute of Statistics and Census, it is estimated that last year the area planted with beans was 16,503 ha, 14,624 ha harvested area for a production of 9,005 mt.
The government is preparing a decree of a shortage in order to authorize the duty free import of 25,000 tons of beans, for the period between June 2018 and May of next year.
As happens every year, the National Production Commission (CNP) must authorize the duty free import of the grain, to cover the annual demand of 48,000 metric tons that can not be met with local production.
The productivity goals set by the Solis administration for production of maize, rice, potato and beans in Costa Rica, will stay only on paper.
The the current government's proposion on assuming power in 2014 was to raise agricultural productivity, mainly from the cultivation of grains such as rice, maize and beans, but everything seems to indicate that it will be an almost impossible task.And although the government blames the climate, which may have had an effect, the reality of recent years shows that lack of agricultural productivity in Costa Rica is more linked to structural factors, such as production costs, than to other factors, such as the weather.
Taking into account the projected demand, it is expected that in the 2016/17 cycle the region will have sufficient but below average maize supplies and a slightly above average surplus of beans.
From the report "Regional Supply And Market Outlook Central America", by the Famine Early Warnings Systems Network:
This report summarizes the supply and market outlook for white maize grain, dry beans, and rice in the Central American countries of Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua for the 2016/17 marketing year. Production and marketing in Mexico, an important source of dry beans and maize, are also discussed. Regional production for the 2016/17 marketing year (through July 2017) is expected to be average (Figure 1). Taking projected demand into account, the region is expected to have belowaverage, but sufficient maize supplies and a slightly above-average bean surplus. The region will maintain deficit in rice (Figure 2).
Due to the effects of El Niño, a drop of 38% has been forecast in the 2016-17 harvest and 5,450 tonnes will need to be imported to meet domestic demand.
The 5,450 extra tons more that Costa Rica will import this year as recommended by the National Production Council (CNP) will be added tothe 9,432 tons that have already been approvedby a decree for the period July 2016 to June 30, 2017.
Except for cereals, in August prices rose for all commodities covered by the FAO food price index, led by dairy, oils and sugar.
From a statement issued by the Food and Agriculture Organization:
The FAO Food Price Index* (FFPI) averaged 165.6 points in August 2016, up 3 points (1.9 percent) from July and almost 7 percent above the corresponding period last year.
Behavior and price trends in production of white corn, black and red beans, wheat and rice in Mesoamerica and the Caribbean in June 2016.
From the Regional report on the Basic Grains Market in June 2016:
In Mesoamerica and the Caribbean in May 2016 white maize prices showed stable trends compared to April 2016, despite declining regional supply due to the completion of harvests and reduced inventories from 2015, but these were offset by world imports.In beans, stable prices were observed, not greatly affected by the losses in Apante and with a slight reduction in prices in Costa Rica and Mexico.In general, black bean prices have been favored by imports, and the use of substitute products as in the case in Haiti. Rice prices have remained stable in most countries, except Haiti where there was an increase due to the depreciation of Haitian local currency.
Productivity of beef, pork and onions improved between May 2015 and April 2016, while projected goals were not achieved for rice, beans and white corn.
The goals set at the beginning of the Solis management to facilitate conditions for raising agricultural productivity have been met by half, since of the products identified as "sensitive" because of strong competition faced externally, only beef, pork and onions managed to exceed the targets set for the first year.
The country needs to buy 10,000 metric tons of the grain in order to meet domestic demand from July this year to June 30, 2017.
The National Production Council has recommended that the Ministries of Agriculture and Foreign Trade prepare a decree declaring a bean shortage in the country and authorize its importation.
The Colombian government has reduced tariffs to 0 on imports of lentils, beans and garlic, and suspended the price band for crude and refined oils.
From a statement issued by the President of Colombia:
The National Government has approved a reduction to 0% on tariffs on the import of lentils, beans and garlic, and has temporarily suspended the price band for crude and refined oils, which will ease the cost of the food basket for Colombians during the first half of 2016.
Producers in Costa Rica must further improve their productivity if they want to compete with the low prices offered for the same product internationally.
Currently a quintal of the grain sells in Costa Rica for around $40, whereas inside the Costa Rican market producers are trying to sell their harvest for $60, arguing that industrialists are offering them at lower prices in order to buy their production.
By the end of 2014, 11% of the total land area was cultivated with annual crops, 14% permanent crops, 2% was uncultivated agricultural land, and the rest forest areas, homes and other areas of non-agricultural use.
National Agricultural Survey 2014, National Institute of Statistics:
Land use
Out of the sample framework that is 7,354,100 hectares 11% were planted with annual crops, 14% with permanent crops and 2% was uncultivated farmland, 24% was pasture, 52% forest, scrub and areas for other uses, such as forest areas, homes, backyards and other non-agricultural uses.
The decree which states that the domestic grain is insufficient to supply the local market, enables industries to import with zero tariffs in quotas which are proportional to local purchases.
Following complaints by agribusinesses about the delay in the declaration of a shortage, the government has finally signed the decree that authorizes the purchase of grain from abroad, tax-free.
Grain importers are complaining that the study to determine the shortage was made in June and the government has still not signed the decree allowing duty-free imports.
Another problem denounced by the National Chamber of the grain industry is the that the shortage decree which must be signed by the head of the agriculture and economics ministries, will only be effective in November, when normally it "applies until January of the next year ...