Venezuela Corn: ALADI Gives Tariff Exemption to LATAM Players
Talk to our team about AgFlow's offering →
Reading time: 2 minutes
In MY 2023/24, Post forecasts a 27 percent decline in Venezuelan Corn imports to 800,000 MT, with U.S. Corn accounting for 50 percent of imports (400,000 MT). This decline is based primarily on the growth of domestic production, in addition to steady food Corn consumption and slower growth in the demand from the poultry industry.
Venezuelan Corn imports totaled 1.1 million MT in MY 2021/22, with yellow Corn accounting for 77 percent (837,000 MT) of imports and white Corn for 23 percent (253,000 MT). The significant suppliers of Corn were the United States (480,000 MT and 44 percent market share), Brazil (299,000 MT and 27 percent market share), Argentina (199,000 MT and 18 percent market share), and Mexico (113,000 MT and 10 percent market share). Imports of yellow Corn from the United States accounted for 41 percent (340,000 MT) of the total, and imports of U.S. white Corn accounted for 55 percent (140,000 MT).
The private sector currently makes all Corn imports. Since 2018, Brazil and Argentina have gained market share and are now the main competitors to U.S. yellow Corn. Corn imports from these countries benefit from a 100 percent tariff exemption without the need to apply for it, allowing them to enter the Venezuelan market at competitive prices. Despite production growth and relatively stable demand, Venezuela still has a deficit of about 47 percent of Corn to cover its local demand. In the case of white Corn, this deficit is 16 percent, and 70 percent in the case of yellow Corn.
According to AgFlow data, Venezuela imported 0.15 million tons of Corn from Brazil in June 2023, followed by the United States (33,745 tons). Total imports hit 0.4 million tons in March-June 2023.
In MY 2023/24, Corn consumption is forecast to grow 3 percent to 2.1 million MT based on a slight growth of poultry production. Post forecasts a 6 percent increase in feed consumption to 950,000 MT in MY 2023/24, supported by an expected recovery in chicken and egg demand from the second half of 5 2023. Food, Seed, and Industrial (FSI) consumption remains unchanged at 1,100 MT, with an estimated per capita human consumption of 40 kg. Corn flour consumption has been stable historically, and its main competitors are rice, pasta, and wheat products.
Corn consumption is estimated at 2 million MT in MY 2022/23, in line with USDA’s official estimates. Feed consumption is revised to 900,000 MT due to the economic slowdown in the first half of 2023. Accelerating inflation and the corresponding drop in purchasing power has caused a decline in chicken meat and egg consumption, pushing finished product stocks to critical levels. In MY 2023/24 Post forecasts a 32 percent decline in ending stocks to 52,000 MT, given lower imports and slight consumption growth in MY 2023/24. There are no government policies to regulate grain inventories in Venezuela.
Corn Policy in Venezuela
Importers pay tariffs and VAT for yellow Corn, white Corn, and Corn flour. To receive an import license, they must purchase the domestic crop first and import the deficit, if any, to supply domestic demand. Importers may benefit from a total or partial exemption of tariffs and VAT if they meet certain conditions. Applications for exemption are reviewed on a case-by-case basis by the Ministry of Economy.
Venezuela is suspended from Mercosur. However, it has a preferential trade agreement with Argentina, Brazil, and Uruguay under the Economic Complementation Agreement No. 59 of ALADI (Latin American Association for Integration). Corn and rice from these countries are subject to a 100 percent import tariff exemption. Venezuela’s Seed Law of December 2015 prohibits the importation of genetically-engineered seeds, including Corn seeds. However, Venezuela permits the importation of biotechnology-derived Corn.
Other sources: USDA
Try AgFlow Free
Access Free On Updates for Corn, Wheat, Soybean,
Barley, and Sunflower Oil.
No Credit Card Required & Unlimited Access In Time