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%.
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.
As part of a long-term plan to increase grain sales to the North American country, a group of Nicaraguan producers will start with a first shipment of 40,000 hundredweight.
The group of producers leading the initiative explained that the sale will be made jointly with Honduran producers.In the case of Nicaragua, it is expected that about $2 million will be generated from the export of 40 thousand hundredweight.
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.
To compensate for the reduction in local production, the government plans to allocate $8.8 million for the purchase of 39,000 hundredweight of beans and 230,000 hundredweight of corn.
In the period from January to August 2014, the government imported maize from the United States and Mexico, and in the case of beans, 60% was purchased from the US, 20.3% from Canada, 11.4% from China, 6.7% from Nicaragua and the rest 1.5% from Argentina.
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.
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 government will control 95% of the 20 tons of red beans that have been authorized for duty-free purchase from any country which is a member of the World Trade Organization.
The remaining 5% will be distributed "... on a first come, first serve basis, until the available volume of each quota runs out," says ministerial agreement 025-2014 as reported by Laprensa.com.ni .
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.
In order to ensure supply for the domestic market, the government has announced that it is negotiating grain imports from Colombia and Ethiopia.
Given the reduction in the harvest in the months of December 2013 and January 2014, the Government of Honduras has announced that it will resort to importing beans as part of a strategic plan to ensure supplies in the coming months.
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.
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.
Costa Rican importers are demanding solutions after health checks prevented the entry of 20 thousand kilos of Nicaraguan red beans because they contained traces of soil.
The Nicaraguan union is complaining that the Costa Rican State Phytosanitary Service banned the entry of about 20 trucks carrying red beans after finding traces of dirt and sticks in the shipments.
Once the end of the 2013-2014 crop season has finished 1.2 million pounds of black beans will have been sold to Venezuela.
"A larger effort has been devoted to the production of black beans for export, due to the security afforded by the market agreement between the governments of Venezuela and Nicaragua," said the president of the National Union of Farmers and Ranchers (UNAG), Alvaro Fiallos, alluding to the Bolivarian Alliance for the Peoples of Our America (ALBA).
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.