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 last 16 years the amount of land cultivated with white corn has grown at an average annual rate of barely 1%, while in the case of beans, growth has been at an average annual rate of 6%.
From the executive summary of the report "Current situation of basic grains in Honduras", prepared by the Honduran Council of Private Enterprise:
It has been reported that the government has reactivated licensing for the export of one million hundredweight of red beans to El Salvador.
The Ministry of Economic Development (SDE) has authorized the re-granting of licenses for export because a harvest of 3 million hundredweight of red beans has been forecast, two million of which will go to the domestic market and the rest can be sold.
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. This is not the first time that this difference in price has arisen, and this time, the government has said it will buy part of the local crop from producers in the south "... at a price that is double the price from abroad".
Costa Rica and Honduras are the countries with the highest rates as of July 27th, 2014 for red beans, costing $2,133 and $1,695 a metric ton, respectively.
The shortage of beans has raised prices across the region and all countries have been forced to authorize emergency imports in order to supply markets.
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.
In Nicaragua, the largest producer in Central America, the price of a metric ton increased from $602 in May 2013 to $1676 in May this year.
Of the 'seda' variety of red beans, the countries with the largest price increases are El Salvador and Nicaragua, with increases of 80% and 178%, respectively. Guatemala reports a 130% increase in the 'rojo tinto' variety of red beans, according to the Agricultural Council (CAC).
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 partnership between producers and the government is being analyzed so that the Honduran government can maintain a strategic reserve with set prices.
Through the partnership, basic grain producers are looking to store corn and beans on the premises of the National Institute of Agricultural Marketing (IHMA) in exchange for negotiated prices with the government of Honduras.
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.
The competition to secure supplies of beans has led Salvadoran importers to buy in advance Honduras’ harvest.
An article in the Honduran news portal El Heraldo reports statements by Luis Donaire, from the agricultural union PROGRANO, "Producers have turned again to El Salvador for funding. Some have planted by their own efforts, but between 25% and 30% have used Salvadoran funds"
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