U.S. Corn Exports to Colombia Set Record
U.S.-Colombia TPA shows effectiveness of strong trade policy
U.S. corn exports to Colombia have set a new record every year since the U.S.-Colombia Trade Promotion Agreement (TPA) entered into force into 2012, showing the effectiveness of strong trade policy and subsequent market development work to increasing sales of U.S. agricultural products.
“Colombian livestock and feed producers have benefitted from the cost advantages provided by the trade agreement with the United States for their grain needs,” says Marri Tejada, U.S. Grains Council (USGC) regional director for the Western Hemisphere. “Larger imports of U.S. grains and co-products depend on industry growth, higher inclusion rates and further educational activities for end-users.”
The free trade agreement between Colombia and the United States was signed in 2006, but not put into effect for six more years. During that time, U.S. grain exports decreased due to more favorable duties for competitors.
USGC helped make the case for the agreement’s ratification, which included duty-free access for the first 2.1 million metric tons (82.7 million bushels) of corn imports in addition to a tariff rate quota for U.S. sorghum.
Once these preferential terms were in place, USGC worked with buyers who wanted to take advantage of the favorable policy, fueling dramatic growth.
U.S. market share in the Colombian corn market has increased from 5.3% in 2012, the year the trade agreement was implemented, to 97.3% in 2014 and 99.7% in 2017.
Colombia imported 4.73 million tons (186 million bushels) of U.S. corn in 2016/2017, ranking as the fourth largest buyer. Eight months into the 2017/2018 marketing year (September 2017-April 2018), Colombia had already imported 4.17 million tons (164 million bushels) of U.S. corn, up eight percent from the same time the prior year and jumping to the third largest buyer for the current marketing year.
USGC’s Outlook Colombia 2030 report projected Colombia corn imports will reach 216.5 million bushels by 2020 and 307 million bushels by 2030, with the majority of that demand met by U.S. producers.
Colombia also represents a burgeoning market for U.S. ethanol, with the Colombian government increasing the national blend mandate to E10 in March 2018.
Colombia has a growing domestic ethanol industry, producing sugar-based ethanol. U.S. ethanol enters Colombia duty free per the terms of the U.S.–Colombia trade agreement, but the government’s current low-carbon fuel standard discriminates against corn-based ethanol. Still, some U.S. refineries can meet the greenhouse gas (GHG) emissions reductions required in the standard.
Despite these challenges, Colombia set a new record for U.S. ethanol imports in 2016/2017, purchasing 13.7 million gallons. Imports in the current marketing year have nearly tripled year-over-year to 28.7 million gallons.
Learn more about the Council's work in Colombia here.