Good news keeps rolling in regarding U.S. corn exports as the USDA reported a marketing-year high of 1.488 million metric tons this week. This level is 26 percent above last week and 22 percent over the prior 4-week average. Primary destinations were Japan (465,000 metric tons or 18.3 million bushels), Mexico (230,300 tons or 9 million bushels). South Korea (169,000 tons or 6.65 million bushels), Egypt (127,800 tons or 5 million bushels) and Colombia (93,400 tons or 3.67 million bushels). Additionally, export commitments are running 19 percent ahead of where they were last year at this time. “We’re seeing demand start building again in Egypt as fears of avian influenza subside,” said Chris Corry, senior director of international operations. “Consumption of poultry there is definitely on the rise again – so much so that Egypt is now importing poultry meat, something they have never done before.” Council programming efforts in Egypt are also encouraging imports of distiller’s dried grains with solubles (DDGS). The country first imported 6,000 tons of DDGS in March and they have contracted more. “Yes, we are seeing that corn sales are robust but we’re also seeing DDGS moving into the market in the future,” Corry added. Egypt imported 4.1 million tons (161 million bushels) of U.S. corn in 2004/05, ranking them behind only Japan and Mexico in terms of sales.
The Bush Administration on August 24 formally notified Congress of its intention to enter into a bilateral free trade agreement (FTA) with Colombia. The FTA will establish a 2.1 million metric ton (82.6 million bushel) zero tariff rate quota (TRQ) for U.S. yellow corn and phase out the 25 percent duty on corn imported over the quota over 12 years. In addition, tariffs on malting barley, distiller’s dried grains with solubles (DDGS) and corn gluten feed will be immediately eliminated upon implementation. Sorghum will also receive a 21,000 ton (826,728 bushel) TRQ with the over-quota duties phasing out over 12 years. In addition to the benefits the Colombia Trade Promotion Agreement will have for U.S. corn, malting barley tariffs will be eliminated immediately. Colombian imports of malting barley for the brewing industry have increased steadily to more than 200,000 tons (9,185,920 bushels) annually. The European Union, Australia and Argentina have traditionally been Colombia’s major suppliers of malting barley. By immediately cutting the tariff to zero under the CPTA, this tariff advantage over traditional suppliers should create an opening for U.S. malting barley. As required under U.S. Trade Promotion Authority, the notification begins the 90-day waiting period before the agreement can be signed by the President and subsequent action can be taken by Congress to approve the agreement. Given the waiting period and the lack of time in the Congressional schedule this year, a FTA vote is unlikely to be held before 2007. While the FTA negotiations with Colombia were concluded on February 27, ongoing differences over agriculture during the verification process prevented the details from becoming public until earlier this month. Meanwhile, the FTA that the United States concluded with Peru on December 7, 2005 is working its way through the U.S. legislative process. It is unclear at this time whether there is any possibility Congress will vote on the Peru agreement before it recesses in early October prior to the November elections.
Council delegates from across the Midwest will be traveling to Japan and China to see USGC programs up close as part of the 2006 Corn Mission, Sept. 2-10. The group will start in Japan – the top U.S. customer when it comes to U.S. corn. While there, participants will work to maintain and expand relationships with key trade and industry contacts as well as assess current market conditions, sector demand trends and feed grains and DDGS sales outlook. “We also want to continue letting this very important customer know that the United States will remain a committed, reliable supplier of corn this year and in the future,” said Mike Callahan, senior director of international operations – Asia. >From Japan, the group will continue to China where they will learn about China’s role in the global feed grain market – both as an exporter and an importer. Additionally, the group will tour the U.S.-Sino Dairy Management Training Center, a collaborative effort near Beijing, and meet with buyers of U.S. corn to assess demand potential. Participants include: Stan Boehr of the Nebraska Corn Board; Charles Ring of the Texas Corn Producers Board; Jayne Glosemeyer of the Missouri Corn Merchandising Council; Thomas Gillis of the Wisconsin Corn Promotion Board; and Ron Olson of the South Dakota Corn Utilization Council. Callahan will be escorting the group along with Cheri Johnson, USGC director of communications. To follow the progress of the mission, please visit the Council’s website, www.grains.org, for daily updates.