Can Panama Extend Zero Tariff for Corn Imports in 2023?
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According to the USDA data, in MY2021/2022, Panama’s Corn area harvested and production was 50,000 hectares and 120,000 tons, respectively, with a 2.4 tons/ha yield. Domestic consumption was 0.73 million tons. For MY2022/2023, the USDA forecasts exactly similar figures. The most recent official figures from the Comptroller General of the Republic indicate that during the 2020-2021 agricultural year, a total of 57,370 hectares of corn were planted in the country for the production of 2,708,500 quintals.
In the latest years, the corn harvest in Panama peaked in 2014 at 141,000 tons. The corn that will leave the Panamanian fields at the end of January was to be sold at 20 dollars a quintal, placed in the silos of La Honda in the province of Los Santos, after the producers faced a hard battle with the industrialists to establish that price.
In an informal meeting held in January, the producers demanded a payment of 23 dollars per quintal, which could not be achieved since the industrialists maintained that the current economic conditions were not optimal for an increase in the price. Regarding the price of grain, another source indicated that this act of informally agreeing on prices should draw the attention of the Authority for Consumer Protection and Defense of Competition (Acodeco).
Of the 20 dollars to be paid per quintal of corn, the industrialists will contribute 16 dollars. The Government is for the remaining 4 dollars, one dollar more than last year, explained Valentín Domínguez, President of the National Association of Corn and Sorghum Producers.
In 2020-2021, it was established that the industrialists would buy the grain in three stages, wherein first, they would acquire 30% of the production, then 40%, and later 30% of the grain. The reference price at that time was $17.50 per quintal, of which $14.50 would be paid by the industry and the remaining $3 by the Government, through the Ministry of Agricultural Development, in what is called a “compensation contribution” to producers.
The province of Los Santos continues to produce 80% of the national corn, followed by the province of Herrera. The country imports yellow corn for the agro-industry since the production of meat and milk occurs, to a large extent, from corn-based foods. The poultry industry consumes most of the national corn. A hectare planted with corn currently has an approximate production cost of about 1,800 dollars, stated the President of the National Association of Corn and Sorghum Producers, Valentín Domínguez.
Panama’s Corn Tariff and Trade
The Cabinet Council approved the temporary modification of the national import tariff for corn in May, headed by the President of the Republic, Laurentino Cortizo Cohen, to support agribusiness. This measure was approved by the Council of Ministers through Cabinet Decree 08-22 after the import of yellow corn for animal consumption in the Corn Agri-food Chain was approved on May 10.
Carlo Rognoni, Vice Minister of Agricultural Development, reported that the measure seeks to strengthen the national agribusiness since the corn produced in the country is for human consumption and the one imported is used to process food for animal consumption. Rognoni indicated that imported corn is expected to come mainly from Brazil and Argentina. He also stressed that the agribusiness is committed to buying all the national corn that is available. The validity of the reduction in the tariff from 40 to 0% for corn for industrial use would be until December 31 of this year.
According to AgFlow data, the United States shipped 394,981 tons of corn to Panama in Jan-Oct 2022, followed by Brazil (172,456 tons). In 2020, Panama imported corn seeds worth $2.66 million, becoming the world’s 86th largest importer of corn seeds. Panama imports Corn Seed mainly from the United States ($1.73M), Thailand ($532k), Colombia ($381k), Costa Rica ($15.6k), and Guatemala ($3.26k).
Other sources: PRESIDENCIA GOB PA
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