Colombia suspended tariffs on imports of corn, sorghum and soybeans as of Thursday (09.04.2020/XNUMX/XNUMX) until June 30 to reduce production costs in the agricultural sector, amid the crisis caused by the coronavirus pandemic.
The Ministry of Agriculture announced that it had left open the possibility of extending the measure for another three months. The cereals on which tariffs were suspended are used to make animal feed and are imported due to insufficient local production.
The coronavirus pandemic has disrupted food supply chains around the world as safety measures have stalled shipments, increased costs and delayed harvests.
The Ministry of Agriculture explained that animal feed accounts for up to 60% of the production costs of chicken, eggs and pork and its value has increased due to the rise in the exchange rate, which has depreciated by 27% annually.
"For this reason, we have implemented this measure with which we will contribute to the control of production costs, which ultimately has an effect on consumer prices.", said Agriculture Minister Rodolfo Zea in a statement.
Colombia imports corn mainly from the United States and to a lesser extent from Argentina and Brazil.
The move to suspend tariffs reduces the cost of imports from major suppliers such as Brazil and Argentina, a potential blow to U.S. exporters which have enjoyed lower import tariffs to the Colombian market since a Free Trade Agreement came into force in 2012.
Since then, Colombia has grown to become the third-largest importer of U.S. corn and soybean feed.
U.S. exporters said the suspension of tariffs has brought their grain prices in line with South American prices, the latest blow to farmers and shippers in the top crop-exporting nation.
"This is definitely not good for us.“said one American exporter, who declined to be named because he is not authorized to speak to the media.The first impact will be on soybean meal. If they extend it, we could see corn also being damaged because the South American crop comes into play.”
Source: Reuters
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