Colombia Wheat Import: US Export Depends on Canadian Price
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More than 70 percent of imported Wheat in Colombia is used for bread and pastry flour, which aligns with the average for the South American region (69 percent). Imported Wheat used for cookies and crackers is 14 percent, slightly higher compared to 8 percent in South America. Wheat for pasta, at 11.5 percent, also aligns with the regional average. Household baking flour accounts for 4.5 percent of imported Wheat.
Colombia’s Wheat imports are duty-free from the U.S., Canada, the EU, and the South American trade bloc known as Mercosur. Average Wheat production in Colombia has decreased significantly over the last 40 years, currently under 3.7 million bushels per year, which makes Colombia dependent on imports.
Given that Colombia produces an insignificant amount of Wheat each year, Wheat consumption equals imports at about 66 million bushels annually. Wheat imports from all origins have steadily increased from 51.4 million bushels in 2010 to nearly 70 million bushels in 2021. According to AgFlow data, Colombia imported 46,989 tons of Wheat from the U.S. in July 2023, followed by Canada (45,000 tons) and Romania (25,300 tons).
Colombia’s U.S. Wheat imports include:
· Hard red winter, 35 to 55 percent of total imports.
· Soft red winter makes up 40 to 50 percent of total imports.
· Soft white, which has been increasing and now makes up 4 to 8 percent of total imports.
The U.S. typically supplies between 35 to 40 percent of Colombia’s annual milling Wheat imports, depending on Canadian Wheat prices. Duty-free access and the proximity of U.S. ports allow Wheat to compete effectively with other suppliers, especially Canada and Argentina. U.S. Wheat Associates (USW) works to maintain this market share with help from Washington and other state commissions.
Primary activities include working with leading commercial Wheat suppliers in Colombia to increase U.S. Wheat offers from the PNW and the Gulf of Mexico and providing technical support to prominent Colombian bakers to encourage them to incorporate U.S. Wheat as a quality product ingredient. USW also works to establish relationships between PNW traders and soft white Wheat buyers in Colombia, promoting more purchasing alternatives to Colombian customers.
Stocks In MY 2023/24, ending stocks are forecast to decrease to 364,000 MT as Wheat importers make purchasing decisions based on short-term necessity, given high international prices and the strong U.S. dollar against the Colombian peso. The feed and Wheat milling industries maintain limited carry-over inventories of grains, but most mills can store product for two months of operations.
Colombia’s Wheat Policy
There are no Government programs in place for Wheat. The new Government in Colombia has noted that Colombia has non-competitive production systems and unfavorable climatic conditions for Wheat cultivation that will not allow it to substitute imports. Implementing trade agreements with Canada and the United States has established favorable trade conditions with duty-free Wheat imports. Mercosur Wheat is subject to the APBS mechanism. The APBS price stabilization system is explained in the policy section for corn. Table 4 illustrates Wheat’s annual floor and ceiling prices, effective from April 1, 2023.
The reference price is the bi-weekly average of daily, weekly, or monthly quotations observed in the referential markets (FOB Gulf based on the Kansas Board of Trade’s first position for Wheat HRW). Such a reference price must be expressed in terms of CIF. The practical duties under the APBS for each period are established based on the bi-weekly CIF reference prices. Current Mercosur duties for Wheat are zero as the current reference price ($412) exceeds the ceiling price. Colombia currently has 15 trade agreements in force, most of which have zero duties for Wheat, including Canada and the United States.
Other sources: WAGRAINS
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