The increase in the international prices of corn and soybeans, inputs used to produce animal feed, threatens to put upward pressure on the production costs of meat, eggs and dairy products.
In recent months, the international price of a bushel (27 kilos) of soybeans increased by 28%, from $10.6 to $13.62, between November 1, 2020 and January 28, 2021.
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.
In the first quarter of 2018, imports of solid soybean waste in the Central American countries amounted to $131 million, 26% more than in the same period in 2017.
Figures from the information system on the Market for Solid Soybean Oil Waste in Central America, compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption = "Click to interact with graph"]
Through an agreement with the union of soy and corn producers in Mato Grosso, promotion will be given to the the transfer of grains from the north of Brazil to markets in Asia.
The Canal Authority reported that "...The agreement allows the coordination of joint marketing activities, exchange of market studies and information on commercial flows, as well as modernization and improvement programs."
In 2016 Central America purchased 1.2 million tons of solid soybean waste, 10% more than in 2015, and the vast majority came from the US.
Figures from the Information System on the Solid Waste Soybean Oil Market in Central Area compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption="Click to interact with the graphic"]
In 2013 49 million kilos of oil and fats were sold abroad generating $78 million.
The oil industry in Nicaragua consists of the companies Agroindustrial de Oleaginosas, Agrosa, E. Chamorro Industrial, S.A., Aceitera Corona and Aceitera El Real, and the four between them currently have 13,000 and 14,000 hectares under production.
"The country has five crops that produce oleaginous plant material: palm oil, soy, sesame, peanuts and cotton, of which the one being promoted the most is palm, which is concentrated mainly in the South Atlantic Autonomous Region (RAAS by its initials in Spanish) ... there are clearly defined niche markets in Europe and the United States which together with the comparative advantages of the country make palm oil one of its star products," explained Caldera to Elnuevodiario.com.ni .
Soybeans, corn and cotton are the main GM crops in Brazil, a country that accepts and promotes genetically modified foods.
In Brazil the number of hectares planted with genetically modified soybeans, corn and cotton amounts to 36.6 million, varieties of crops which according to producers reduce costs, increase production and generate higher profits.
Oil in containers measuring from 1.7 to 2 liters can enter Panama duty-free for a year.
Through a Cabinet Decree, the Panamanian government has removed the tariff, for one year, on imports of soybean oil in bottles of 1.7 liters and 2 liters. It is established that other refined oils will incur a 10% tariff.
"... The decision to eliminate the tariff on soybean oil is because this product is part of the six foods that President (Ricardo Martinelli) announced will be sold at low cost in the so called jumbo fairs and jumbo shops," said Oscar Osorio, Minister of Agriculture.
Brazilian investors estimate that a minimum of 50,000 hectares are needed to develop soybean production for the domestic market and export.
This was confirmed by the Deputy Minister of the Ministry of Agriculture and Livestock (SAG), Ramon Escobar, during a meeting between investors and members of the SAG. The mission is composed of representatives of sectors including energy, infrastructure, tourism and agribusiness.
The Inter-American Institute for Cooperation on Agriculture should not overreact to current price conditions, avoiding trade-distorting policies.
A statement from the Inter-American Institute for Cooperation on Agriculture (IICA) reads:
IICA: Rising prices of agricultural products is temporary
The increase in prices for corn, soybeans and wheat will not cause a food crisis in Latin America and the Caribbean, as occurred in 2007-2008, says a report by the Institute.
The key to the global soybean market is China, which consumes 60% of world exports, and it is very likely to continue growing.
An article by Bloomberg News reports that "soybean purchases by China, which buys more than 60% of global exports, are heading towards depleting North American reserves and reducing the amount available to importers in Southeast Asia, said the American Soybean Association, ASA"
In July, world food prices rose by 10% compared to the previous month, with the most noteworthy being corn and soybeans which reached record levels.
A statement from the World Bank reads:
Severe droughts raises food prices and threatens the welfare of the poor
Washington, August 30, 2012. World food prices rose by 10% in July compared to the previous month and corn and soybeans soared to record levels due to a dry summer and unprecedented high temperatures in the U.S as well as in Eastern Europe, according to the latest edition of an Alert report on food prices from the World Bank Group (WBG).
Two months of severe drought in the United States, the world's largest producer of soybeans and corn, has raised prices to record highs.
Yesterday, August 21, soybean prices opened at a record high: a bushel for November delivery, the current benchmark contract, now costs up to $17.26 per bushel (about 25 kg).
The situation is similar with corn, which approached $8.38 in session.
The rising price of its main raw material has decreased profit margins of companies in the food industry, who are looking for alternative suppliers and using future hedge purchases.
Representatives of several companies in the food industry in Costa Rica noted that the escalating prices of wheat, corn and soybeans, the main raw material, are added to the U.S., the largest supplier of grains in the country, facing its worst drought,.