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%.
The government has authorized the purchase of 9000 tons of red beans without tariffs until 31 October.
The permission granted by the Council of Ministers for Economic Integration (COMIECO) to the government of El Salvador will be valid until 31 October for the acquisition of up to 9000 tons of red beans from countries such as Colombia and Mexico.
The rise in price in a market with short supply is the reason for the suspension of three months of the granting of export health certificates for the 'seda" variety of red bean.
From a statement issued by the Ministry of Economy (MINEC):
Joint Action Plan to counter rising prices in beans.
In the framework of its powers and the joint action of the National Consumer Protection, the Ministry of Agriculture and Livestock (MAG), the Ministry of Economy (MINEC) and the Consumer Advocate, have activated a joint action plan which will be effective from Thursday May 15, containing dissuasive and contingent measures against the rising price of beans which has been seen in some markets in the country.
In order to meet internal demand the country needs to purchase 200 thousand tons of black beans, therefore it has temporarily removed import taxes on the grain.
According to the Minister of Agriculture of Brazil, Antonio Andrade, the Government has decided to temporarily remove tariffs applied on the import of the grain, with the goal of guaranteeing supply without pushing prices higher.
It is estimated that domestic production will not cover domestic demand due to drought forecast for this cycle, so the government will increase the import quota of the grain by 50,000 tons.
Official counts estimate that domestic production will be insufficient to meet domestic demand, given the drought forecasts for the next cycle, so the Ministry of Economy of Mexico has decided to increase import quotas for beans.
The Mexican Ministry of Economy has announced the extension of the validity of the import quota of 100,000 tons of beans during the year 2012.
A press release from the Ministry of Economy reads:
This decision is due to the availability of beans being affected by drought in the north and will contribute to stabilizing the price of this product, which has been experiencing increases in recent weeks, according to information from the National Market Information System (SNIIM in Spanish).
A decree authorized the duty-free import of basic grains, maize and beans, to ensure supply for the population.
By means of Decree 907, the MAG has been empowered to buy and sell seed and grain, bean and maize and materials for their production, in order to guarantee the price of the product and transfer it at a reasonable cost to the public.
A press release from the Ministry of Agriculture and Livestock in El Salvador states:
The Ministry of Agriculture will provide $11 million to compensate for losses caused by the excessive rains.
Hugo Flores, deputy minister, explained that the money will go towards replanting, renovating at-risk areas, and supporting the aquaculture sector, among other schemes.
The measure seeks to prevent a shortage of basic grains in 2012, and will be complemented by the duty-free import of 50,000 tons of white maize and 25,000 of red beans.
Decrees awaiting approval by Congress would authorize the government and private buyers to purchase corn and beans duty free.
Minister of Agriculture and Livestock, Guillermo Lopez, asked Congress to act promptly in passing ordinances that will allow the duty-free purchase by the government of up to $5 million worth of white corn and red or black beans, and by individuals of up to 50 thousand tons of corn and 25 thousand metric tons of red or black beans.
Damages to crops caused by recent rains will force the region to import beans again this year, just as in 2009 and 2010.
Nicaragua, Central America's main red bean exporter has stated that it will struggle to export beans to the rest of the region due to the climatic conditions that have affected its crops. Approximately 560,000 'manzanas' (40,000 hectares) have been lost.
In order to ensure domestic supply and prevent price hikes, the government has announced it will import beans and corn.
Guillermo López Suárez, minister of agriculture and livestock indicated that importing beans "is necessary" to prevent shortages. The beans will be bought from China, South Africa and Ethiopia and the maize will be imported from Mexico and South America.
Reduction of the national harvest means that the private sector must buy grain abroad.
Heavy rains in 2010 hit much of the country and affected grain production so heavily that the current national harvest is not sufficient to supply the domestic market.
Owing to this situation, the private sector has had to import beans from outside markets, and then subject them to various quality and safety tests before distributing them in the country.
The country has already seen 180,000 hundredweight of beans arrive on its shores this year, 40% more than in the same period in 2010, which has stabilized prices.
On April 20, 75% of the 90,000 hundred weight bean shipment will arrive, which have been purchased from China, according to Guillermo López Suárez, head of El Salvador's Agriculture and Farming Ministry (MAG in Spanish). The rest is due at the end of the month or the beginning of May.
The Ministry for Farming has still not managed to import the amount of beans necessary to cover the national supply shortage.
To date, the sending of the first 60,000 hundredweight has not been completed and no information has been made available as to the terms of the supply agreement.
Elsalvador.com reports: "When the reason for the delay is questioned, nobody can explain it.
90 thousand quintals of Chinese beans will enter the country in March and will be distributed two weeks later.
The announcement was made by the head of the Ministry of Agriculture, Guillermo López Suárez.
"It is hoped that the marketing of the beans will allow the price to reach $ 0.75, as the government will subsidize part of the price," stated the article in Laprensagrafica.com.