March 15, 2005

USDA Venezuela seen increasing 04-05 wheat imports

In 2004/05 Post estimates a slight increase in Venezuelan wheat imports to 1.56 million tonnes. Market share for the US has been recovering in the past two years, and it is expected to show further modest increases in 2005/06, according to a USDA report posted Monday on the Foreign Agricultural Service Web site.

Executive Summary

Venezuela is heavily dependent on imports of wheat for domestic flour milling activities. For 2004/05 Post estimates that total wheat imports will increase slightly to 1,565 million tonnes as demand for pasta and bread still remains a preferred staple in the Venezuelan diet. An increase in US durum exports contributed to a major recovery of US market share last year and the same trend is expected this year.

Total yellow corn imports were slightly above Venezuela's TRQ at 692,000 565 million tonnes in 2003/04. Post estimates a decline in 2004/05 due to licensing restrictions and Brazilian poultry imports. Given the success of the GOV's new food distribution system, Mercal, local poultry and pork producers are anxious to penetrate this market. Currently, the local industry is negotiating with the government to achieve this goal. Imports are forecast to increase slightly in 2005/06. However, if these negotiations are successful, there will be a substantial increase in demand for domestic poultry and pork in 2005/06.

Sorghum production is expected to increase slightly in 2004/05 to 340,000 tonnes due to better weather conditions. Post is also forecasting a continued increase in area and yield for 2005/06. Due to the corn licensing restrictions and the same known battle to absorb the domestic sorghum and corn crops, processors have had to resort to higher inclusions of industrial by-products as DDGS (distiller dried grains with solubles) which do not require import licenses.