This week’s U.S. Grains Council’s Chart of Note illustrates that Colombia is importing a similar amount of U.S. corn in the first four months of this calendar year as compared to last year and will likely exhaust its duty-free quota soon. This is in stark contrast to just two years before when only 18,500 metric tons (728,000 bushels) of U.S. corn were imported by Colombia from January to April 30. This large increase in the past two years was made possible by both greater availability and the U.S.-Colombia free trade agreement (FTA).
The FTA gives U.S. corn imports up to 2.43 million tons (95.6 million bushels) duty-free treatment, which has been advantageous so far this year. U.S. corn will likely continue to see a price advantage over other competitors even when the country is forced to import outside the duty-free treatment. The quota increases 5 percent every year until 2024 when U.S. corn will not have a duty to enter Colombia.
“The Colombian industry estimates importers are planning to purchase an additional 2.6 million tons (102 million bushels) this calendar year,” said USGC Regional Director of the Western Hemisphere Marri Carrow. “Out of quota U.S. corn will have a 16.5 percent duty applied, which is the same for Argentina and Brazil. Capturing these final year sales will really depend on the basis, but current market dynamics are favorable for the United States to maintain its current market dominance.”
All of this is good news for both U.S. corn producers and Colombian end-users. Colombian importers are reaping the benefit of competitively priced U.S. corn while the United States continues to regain dominance in this market.
