October 22, 2003



Outlook of Venezuela's Soybean Imports; Fall By Nearly 100%




Venezuela's total imports of oilseed products (soybean, soybean oil and soybean meal) are falling as compared to 2001/02.  Soybean imports have dropped by almost 100 percent, followed by reduced imports of soybean oil and soybean meal.  Foreign exchange controls, a restrictive import-licensing scheme and significant drops in food demand are the reasons behind falling oilseed imports. 


However, soybean meal imports from the United States are reaching significant higher levels as compared to previous years, because Bolivian suppliers are not confident of payment procedures due to foreign exchange controls.  Venezuela's soybean meal imports from the United States reached 218,000 metric tons in 2002/03, 159 percent as compared to last marketing year.


Post forecast for 2003/2004 is for modest growth if economic conditions of the country improve.  If consumers can increase their purchasing power, demand for end-products will grow, and if foreign exchange restrictions are lifted, producers access to imported oilseed products will improve.  This report also includes revised trade tables for 2001/02 based on official Government of Venezuela (GOV) data.   




Domestic production of soybeans is minimal therefore; imported soybean products satisfy all local market requirements. Soybeans were imported and crushed domestically to produce oil and meal. Currently, there is no domestic crush of soybeans since the main crusher has been denied access to import licenses.  Licenses have recently been granted for 25,000 tons and crush is expected to resume shortly.




Soybean meal production collapsed due to the sharp fall of domestic soybean crushing.  The major consumers, feed processors for the local poultry and swine industries have reduced purchases due to depressed demand for end-products for the poultry and pork sectors.  


Bolivia has been Venezuela's recent supplier of soybeans and soybean meal for the past three years because as a member country of the Andean Community it does not require import licenses and tariffs are zero.  During the first stages of Venezuela's foreign exchange control, payment procedures for intra Andean Community imports were unclear, creating reservations among Bolivian exporters, which limited shipments to Venezuela.  


At the same time, following Venezuela's two-month general strike (December 2002-January 2003) soybean meal stocks were depleted and importers were in need of replenishing it.   US soybean meal became an option for the Venezuelan industry due to its proximity and availability as opposed to Bolivian product. 


The proximity of US ports to Venezuela provides a relative short delivery time, which can be of an average of 7 to 10 days.  Bolivian product imports can be shipped in an average of 21 days. Other South American suppliers also have shipping time averages of 20 days. 


The variety of feed ingredients that the US can supply and effectively be loaded and shipped to Venezuela, including yellow corn, soybean meal, yellow grease, cereal grouts, etc. turns to be a significant gain over Bolivian shipments, which generally, can only load soybean and soybean meal.




Venezuela's vegetable oil production depends on imports. Over the last year, edible oil prices have gone up over 199% (in Bolivar terms), the most of any basic food product. This has had a dampening effect on demand, which is estimated to be down by 11% for soybean oil in 2002/03.  The GOV included vegetable oil on the list of price control products but this had only a modest effect on controlling price increases.  For additional information about food price control, please refer to GAIN report VE3008.


Soybean oil imports are projected to increase during next marketing year if the Venezuelan economy shows signs of recovery and consumer's purchasing power improves along the way.  Soybean oil imports from South American suppliers continue to have the benefit of preferential tariff with Venezuela, and will be able to reassume previous import levels rapidly. 


Source: USDA