Because yellow corn is imported from the United States at a price of $11 per quintal in Nicaragua and the cost of producing a quintal of sorghum locally is $12.5, competition for local producers is nearly impossible.
Nicaragua is part of the Dominican Republic-Central America-United States Free Trade Agreement, an agreement that allows yellow corn from the United States to enter the local market free of tariffs.
A 4% drop in corn production is projected for the crop yield for 15/16 compared to 14/15.
From the monthly report by the International Grains Council:
Revisions for wheat, barley and sorghum lift the forecast for world total grains (wheat and coarse grains) production in 2015/16 by 9m t m/m (month-on-month), to 1,996m, 1% short of last season’s record.
High production costs, coupled with the progressive reduction in the tariff paid on yellow corn from the United States, are keeping sorghum producers in the country in a state of check.
With the gradual elimination of import yellow corn from the United States, established in DR-CAFTA, a 0% tariff will be reached in 2020, a rate which currently stands at 10.1%.
Poultry producers have sealed an agreement with producers of sorghum which will triple the current sale volume.
The agreement also includes an increase in the price from $3.6 per quintal, the base price from last year.
Manual Alvarez, president of the Union of Agricultural Products of Nicaragua (UPANIC) gave details to the La Prensa of, "... an agreement with poultry farmers on the price of $14 per quintal of sorghum and the sale of approximately 1.5 million quintals because producers are confident that this season’s harvest will be better. "
Record output is expected for basic grains, as well as an increase in cattle products.
Ariel Bucardo Rocha is the Agricultural Ministry of Nicaragua, and he expects corn production to reach 6.900.000 quintals for the premium seeding period.
"Regarding premium bean production, the Ministry is expecting 1.3 million quintals, from 100.000 blocks. For rice, the institution is expecting 1.150.000 quintals, and sees possible, along the harvest, to increase output in over 500.000 additional quintals", reported newspaper "El Nuevo Diario".
The Central American countries have defined strategies to confront the rise in prices and possible scarcity of food. In effect it's an emergency plan that will require an investment of about 560 million dollars. The plan and be concentrated on four products: rice, beans, corn and sorghum.
The Central American plan, aimed at encouraging production of basic grains, includes the creation of a regional network for seed production, joint importation of agriculture inputs, an increase in areas under cultivation, improvements in productivity, and financing for producers.