The estimate for corn usage is informed by the needs of the animal feed sector - corn represents nearly 60% of feed formulations in that South American market - as poultry producers expect higher 2022 production levels in-line with the heightened demand resulting from Colombia’s economic recovery.
The boosted demand has helped offset the rise in poultry and pork production costs, according to the USDA Gain report.
In the first half of calendar year 2021, Colombia’s economy grew 8.8%, noted the publication. Average consumer prices in the country have also increased, by nearly 25%.
Domestic corn production
Looking to domestic production of corn, that is also forecast to increase 4.8% to 1.5m MT based on a 4% jump in the harvested area, reads the USDA report.
Meanwhile, a government initiative launched in March this year is aiming to increase Colombian corn and soybean productivity, substitute imports, and improve trade relationships between producers and industry.
US market share of corn imports
In MY 2020/21, the US market share of Colombian corn and wheat imports was hit by the strong US dollar, high international prices, and increased competition from South American imports, which receive preferential treatment under the Andean Price Band System (APBS), a mechanism that has established zero duties for imports from trading partners such as Mercosur: Argentina and Brazil.
Hurricane Ida’s impact on grain infrastructure and grain barges in the Port of New Orleans and Mississippi River Grain Corridor also did not help.
But the team anticipates that the US will see a recovery in terms of its share of Colombian corn imports in MY 2021-22.
Rice and wheat demand in Colombia is also predicted to recover, said the authors.
Wheat consumption is forecast to grow by 1.5%. “The wheat consumption increase is driven by the food sector as animal feed demand will remain unchanged from the previous marketing year, due to high wheat prices.”