February 11, 2011

Guatemala opens corn, wheat import quotas

The government of Guatemala opened quotas on Wednesday (Feb 9) to ship in corn and wheat tax-free to cover the nation's demand and calm surging local prices.

World food prices hit a record in January, even higher than levels seen in 2008, when a food crisis sparked violent protests in some countries around the world. Poor Central American countries are cutting import duties, freezing prices and subsidising food to try to stave off a devastating hunger crisis.

CBOT corn futures climbed above US$7 for the first time since 2008 on Wednesday (Feb 9) following a US government report that estimated lower-than-expected corn stocks. Wheat rallied along with corn.

Guatemala's government said starting on Thursday (Feb 10) it would open a six-month import quota for up to 25,000 tonnes of wheat flour, and a 90-day quota for 82,000 tonnes of white corn.

A 10% tariff on wheat and 20% duty on corn will be waived, the economy ministry said.

"Given the rise in international wheat prices we have to put this agreement in place to meet the needs of the population," the economy ministry said.

Guatemala imports all the wheat it consumes but hopes to boost corn production by 7% in 2011 compared with last year, when the harvest was hit by heavy rains. Guatemala expects to produce 1.351 million tonnes of corn in 2011.