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.
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.
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.
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.
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.
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.
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 ...
Nicaraguan producers are complain that phytosanitary controls applied by the government of Costa Rica have increased the illegal entry of Nicaraguan beans, estimated at $4 million a year.
On average over 160 containers holding 480 pounds of beans each are smuggled to Costa Rica, amounting to approximately $26,000, as "... a result of phytosanitary measures restricting the entry of beans with impurities," say Nicaraguan businessmen.
Industrialists say prices will keep rising due to shortages caused by the impairment of entry of shipments of red beans from Nicaragua and China.
The shortage of grain in the region and phytosanitary controls which have blocked the entry of shipments of Nicaraguan beans which have traces of soil on them is affecting prices in the domestic market, which have already risen about a dollar per kilo since the first import was stopped in February.
Industrialist point out that the declaration of shortage of grain by the government has failed to solve the problem in the local market, where the price of a kilo has increased by $1.
The National Association of Manufacturers of Beans in Costa Rica (Anifri) argues that the change in the verification of phytosanitary measures by the Ministry of Agriculture is the cause of the grain shortages and price increases in the country.
Fourteen companies have been authorized by the government to acquire 11,264 tons of duty free beans from abroad.
Four of the fourteen companies will be allowed to buy up to 68.7% of the total, the equivalent of 7,739 tons. The declaration of a shortage by the government establishes that grain can be imported from anywhere in the world without paying entry tax of 30% for black beans and 20% for red beans.
The Costa Rican agribusiness sector has indicated that a phytosanitary law is being interpreted without technical or medical reasons to support the rejection of the entry of 100 containers of Nicaraguan beans.
The National Association of Bean Manufacturers (Anifri) insists that the Ministry of Agriculture should review the Phytosanitary Act and reconsider the way in which they are exercising controls on grain containers entering from Nicaragua, a country from which most of the beans consumed in the country are imported.
The Government is analysing whether to declare a shortage of beans and authorize the entry, of zero tariff grain from countries outside of Central America.
A study which quantifies purchase inventories that industrialists have made to local producers, will be used as a basis for the National Production Council (CNP) to determine the amount and type of grain to be imported and recommend to the institutions responsible whether they should declare a shortage. Once the declaration has been made and in accordance with the Act 8763, there would be no tariffs applied on the import of beans from countries outside of Central America with countries which have international treaties that are in force.