BOGOTA, April 9 (Reuters)Â –Â Colombia will suspend tariffs on imports of corn, soy and sorghum until the end of June to reduce agricultural production costs during the global crisis caused by the spread of the coronavirus, the Ministry of Agriculture said Thursday.
Animal feed accounts for up to 60% of production costs, Environment Minister Rodolfo Zea said in a statement, explaining that prices have increased due to the recent fall in the value of the peso against the dollar.
“We are introducing this measure to help control production costs, which will ultimately affect prices for consumers,” Zea said.
The coronavirus pandemic has upended food supply chains around the world as security measures have stalled shipments, driven up costs and delayed harvesting.
The move to suspend tariffs lowers the cost of imports from major suppliers such as Brazil and Argentina, a potential blow to U.S. exporters that have enjoyed lower import duty access to the Colombian market since a bilateral agreement took effect in 2012. Colombia has since grown to become the third-largest importer of U.S. corn and soybean meal animal feed.
U.S. exporters said the suspension of tariffs has put U.S. prices on par with South American grains, the latest blow for farmers and shippers in the major crops exporting nation.
“This is definitely not good for us,” said one U.S. exporter, who declined to be named as he is not authorized to speak to media. “The first impact will be on soymeal. If they extend it, we could see corn hurt as well because South America’s harvest comes on line.”
As well as controlling feed costs in agriculture, the measure has been taken because Colombia is not self-sufficient in the production of corn, sorghum, soy and soybean meal, the ministry said.
To that end, the ministry also plans to establish a series of initiatives to increase national cereal production which will improve the country’s competitiveness, it added.
