Highlights: South & Central America and Caribbean Market Report Submitted to USDA FAS and USDBC Prepared by USDBC Regional Representative Roman Kutnowski and International Representative Ellen Levinson June 30, 2017 USA U.S. dry bean exports in April 2017 were 26,387 MT, 32% less than April 2016 s 38,781 MT. Top five destinations were Mexico (7,109 MT), Canada (4,349 MT), Italy (3,101 MT), Dominican Republic (1,864 MT) and UK (1,596 MT). From September 2016 through April 2017, U.S. dry bean exports worldwide were 260,614 MT, down 10% compared to the same period last year. Argentina The Argentine dry bean harvest is now underway. The June 4 9 USDBC trade mission found beans north of the Bermejo River were affected by mold, but positive conditions prior to the onset of mold limited damage. Production will be an estimated 15 20% above last year. This is where 90% of Argentina s alubia (white) beans and most of the colored beans cranberry, dark red kidney beans and light red kidney beans are grown. South of General Guemes City in the predominant black bean growing region, there were favorable weather conditions throughout the growing period with some isolated cases of white mold and we expect production will be 10 15% above last year s level. Overall, Argentina s dry bean exportable supplies will not increase as much production because of very limited carryover stocks available for export. Brazil The first and second harvests supply over 98% of domestically grown black beans in Brazil. Since this is not enough to meet demand, in the second half of the year Brazil imports black beans. Most are sourced from Argentina, a fellow Mercosur partner, and enter duty free and overland. China is typically the second source, but Chinese quantities have fallen precipitiously and quality is not reliable. This has opened the door to U.S. imports and the top packagers are pleased that the quality contracted is the quality delivered. Due to heavy rains at harvest time in the State of Parana, the prime black bean growing state, Sao Paulo Bolsinha black bean prices were trending upward (raging between $930 to $1050 per MT) since remaining black beans were below average quality. Buyers reported contracting for Argentine beans and one told us his company contracted for U.S. and Canadian black beans for September October delivery. Carioca bean prices remain firm but started to show a downward trend with the output of the second harvest and the start of an early third harvest. Conab estimates carioca bean production for the third crop will increase by 24% from last year. Nonetheless, in country analysts anticipate that there could be issues with carioca bean supply in September and October.
Costa Rica The National Production Council (Consejo Nacional de la Producción, CNP) anticipates that 2016/17 dry bean production is down 40% this year compared to the 3 year average (2013/14 to 2015/16). The Costa Rican Government authorized 14,251 MT duty free imports of black and red beans, which was allocated among importers and the allocations are valid until June 30, 2017. According to CNP sources, the 14,251 MT have been imported thus far. New allocations should soon be announced for 2017/18. Colombia Domestic production rebounded last summer after two years of drought and prices fell compared to last year. During a recent visit to the country, the USDBC International Representative and Regional Representative found that popular domestic beans were widely available and regional procurement was filling most of the gaps. There were some exceptions white cargamantos (similar to cranberry beans) and red cargamantos (dark red speckled beans) were in short supply and some buyers were looking for U.S. cranberry beans for immediate delivery or after the new harvest. Dominican Republic Buyers were seeking U.S. dry beans after the 3 month import ban imposed by the Dominican Government expired on March 31, 2017. U.S. bean shipments in March April were 6,437 MT compared to zero in February. The DR Government January through March 2017 dry bean import prohibition, and its administration of the import licensing system are two challenges to full implementation of DR CAFTA. Thus, in early June USTR and FAS met with the DR government to discuss these issues. The DR said it would submit a proposal for future implementation of the DR CAFTA dry bean import provisions. USDBC is following these discussions closely and providing input. The timing is important since the USTR and Commerce Department are reviewing implementation of Free Trade Agreements. El Salvador In early June, the Salvadoran Government announced an import quota of 12,000 MT of dutyfree red beans from any origin. The quota is valid until December 31, 2017 and appears to be motivated more by political matters (2018 is an election year) rather than supply issues. The government wants to make sure that bean prices a staple food in El Salvador remain in check. Salvadoran traders agreed that the bumper harvest in Nicaragua combined with domestic supply should be enough to meet demand in the second half of 2017. Page 2 31
U.S. Dry Bean Exports to South & Central America & the Caribbean Top Destinations (MT) 90,000.00 80,000.00 70,000.00 60,000.00 50,000.00 40,000.00 30,000.00 20,000.00 10,000.00 0.00 2011/12 2012/13 2013/14 2014/15 2015/16 Sep Apr 2016 Dominican R. Haiti Colombia Jamaica Panama Guatemala El Salvador Chile Brazil Costa Rica Sep Apr 2017 Source: FAS GATS In the first eight months of the 2016/17 marketing year: Black bean buyers from the SCA&C region have been actively seeking product from the United States. Dry bean exports to Guatemala continued at a good pace (up by 62% from last year to 2,490 MT between September 2016 April 2017). Guatemala imported 496 MT of black beans in April 2017 compared to zero last year. U.S. exports to Costa Rica reached 7,501 MT compared to 500 MT in 2015/16 Marketing Year. Costa Rica imported 874 MT of black beans in April 2017 compared to 143 MT last year. The leading export destination in the region was the Dominican Republic, with 17,983 MT (FAS GATS). This was less than the same period last year, which may well reflect that on December 28, 2016, the DR Government declared a ban on dry bean imports from January through March 2017. Some DR importers were caught off guard and were not able to cover their inventory needs. Brazil was the second largest buyer in the region; the U.S. exported 11,699 MT (FAS GATS). This mainly reflects buying at the end of 2016. During USDBC s June trade mission to Brazil we learned that Brazilian packagers are already asking for quotes of U.S. black beans. We were told by the largest black bean importer in the country that they had already contracted for 3,000 MT of new crop U.S. beans for delivery in October. Page 3 31
U.S. Dry Bean Imports from Top Origins (MT) 140,000.00 120,000.00 100,000.00 80,000.00 60,000.00 40,000.00 20,000.00 0.00 2011/12 2012/13 2013/14 2014/15 2015/16 Sep Apr 2016 Canada Mexico China Nicaragua India Thailand Peru Argentina Burma Australia Ethiopia Brazil Sep Apr 2017 Source: FAS GATS In the first eight months of the 2016/17 marketing year: The U.S. imported 6,682 MT of dry beans from Nicaragua, 29% more than during the same period last year. Imports of Peruvian beans increased by 8% compared to last year, reaching to 2,571 MT. The U.S. imported 822 MT from Argentina, a 70% decline from 2,777 MT during the same period last year. Page 4 31
South America Argentina 2017 dry bean harvest in Argentina is currently underway. Last year s high volume sales to Brazil at good prices resulted in little to no carryover of dry bean stocks and stimulated increased planting. Estimated total 2017 seeded area is 438,000 hectares up 6.5% from last year. Notably, planting was higher in beans that sold well to Brazil blacks, cranberries and dark red kidneys. White bean plantings were also up. Due to favorable weather conditions during the growth stage, until mid May the Argentine bean crop was progressing well. At that point, overall production was expected to reach record levels. However, this picture changed in mid May, when persistent rains triggered white mold infection. Northern region crop: During the June 5 9, 2017 field visits by the USDBC trade mission, we found beans north of the Bermejo River were affected by mold. This is where 90% of Argentina s alubia (white) beans and most of the colored beans cranberry, dark red kidney beans and light red kidney beans are grown. Due to positive conditions prior to the onset of mold, the damage was limited and overall yields will be higher than 2016. We expect production to exceed 2016 by 15 20%, although exportable supplies will increase to a smaller degree since there are de minimus carryover stocks available for export. Southern region crop: Favorable weather conditions were reported throughout the growing period with some isolated cases of white mold south of General Guemes City, which is the predominant black bean growing region. We expect higher acreage and better yields and quality than 2016, with production up by 10 15%. Exportable supplies will increase to a smaller degree since there are very limited stocks available for export. Brazilian black beans were hit by rain damage during the second annual crop. In early June Brazilians were in the market for Argentina s black beans, offering prices around $900/MT FOB border 50% higher than the previous month. These prices generally tracked those reported on the Sao Paulo Bolsinha, the spot market that serves as the main dry bean price discovery mechanism in Brazil. Despite the positive outlook for Argentina s harvest, we believe there will still be opportunity for U.S. suppliers to enter the Brazil market with black beans. This is due to the lack of exportable carryover stocks from last year in Argentina and quality issues with the second black bean harvest in Parana, Brazil. Page 5 31
500,000 Argentina Main Dry Bean Types Area (Hectares, 2016 vs 2017) 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 2016 2017p Alubia Black Bean Mung Bean Cranberry DRK LRK Source: USDBC calculations based on field visits and consultations with agronomists, farmers and traders Brazil Conab Revises Black Bean Production Down As usual, Brazil will depend on imports to meet domestic demand for black beans in the second half of 2017. Most are sourced from Argentina, a fellow Mercosur partner, and enter duty free and overland. China is typically the second source, but Chinese quantities have fallen and quality is not reliable. This has opened the door to U.S. imports, which the top quality packagers find consistently high quality the quality contracted is the quality delivered. In mid to late May, persistent rains hit crops in the south of Brazil, causing some losses and lowering overall crop quality in the main black bean growing state of Parana. Consequently, in June Conab (Companhia Nacional de Abatecimento, National Supply Company ) estimated the black bean crop would be 5% lower than it expected in May. The new estimate is 208,600 MT. Some in country sources point out that the losses could be larger than those reported by Conab. Despite differing views about total losses, the unanimous opinion is that black bean quality is below average. The third harvest, which will start coming out in 20 30 days, will be 93% carioca beans, so it will not add appreciably to domestic supplies of black beans. The leading packagers that deal in Grade 1 beans are negotiating prices with Argentine suppliers. The largest black bean buyer told the USDBC trade mission that they also contracted 5,000 MT from the U.S. and Canada (2/3 U.S., 1/3 Canada) for September delivery. Page 6 31
Production of brown eye beans is expected to increase sharply from last year. Brown eyes are popular in e Northeast of the country and they continue to gain momentum in Asian markets primarily India, but Pakistan and Bangladesh as well. There are currently several proposals underway in Brazil to encourage brown eye production, including a request from producers to set a Minimum Support Price for brown eyes (cariocas and blacks already have MSPs). Brazil s Dry Bean Production, First and Second Harvest (MT) 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 Carioca Beans Black Beans Brown eyed Peas Harvest I and II 2016/17 Harvest I and II 2015/16 Source: Conab Market Outlook Black Beans Because of the heavy rains that hit near harvest time in Parana State, wholesale black bean prices on the Sao Paulo Bolsinha trended upward in late May to early June. Currently, they range between $930 to $1050 per MT. The depreciation of the Brazilian Real against the U.S. Dollar is another factor driving black bean prices up. The quality of the crop was below average and supplies of Grade 1 black beans are scarce. Consequently, the main packagers in Sao Paulo are already negotiating black bean imports. Geographic location and zero duty imports under the Mercosur trade agreement make Argentina the first option for Brazil. China, Bolivia and the U.S. are other origins Brazilian packagers are currently exploring. During USDBC s June 18 24 trade mission to Brazil, we learned that Brazilian packagers have asked for quotes for U.S. black beans. We were told by the #1 black bean importer in the country that they had already contracted for 5,000 MT of new crop U.S. and Canadian beans (2/3 U.S. and 1/3 Canadian) for delivery in October. Carioca Beans In late April and early May, prices surged due to weather issues in some of the main growing regions. In the last week of May, prices trended downward with the output of the second harvest in other growing regions and are expected to remain stable in coming days as an early third harvest enters the market. Page 7 31
There is an important element to follow closely. If the third harvest peaks in July/August instead of August/September, there might be a problem with the domestic supply of carioca beans in September/October. Brazil Dry Bean Prices at Wholesale (USD/MT) Carioca beans Price Region 12 months ago 6 months ago 1 month ago Jun 28, 17 Grower Sao Paulo $1,111.33 $1,106.37 N.A. $782.98 Parana $1,185.65 $838.46 $1,216.05 $684.03 Wholesale Sao Paulo $1,621.40 $878.15 $1,773.40 $927.24 Black beans Price Region 12 months ago 6 months ago 1 month ago Jun 28, 17 Grower Parana $767.83 $1,007.15 $709.36 $658.69 Rio Grande do Sul $777.76 $1,056.76 N.A. N.A. Wholesale Sao Paulo $967.77 $1,252.73 $924.70 $937.37 Sources: Conab and Industry Members. Prices Expressed in BRL/60kg bags and converted to USD/MT. U.S. Dollar to Brazilian Real One Year Exchange Rate Source: xe.com Imports Brazil's dry bean imports from the United States for the period September 2016 through April 2017 reached 15,379 MT there were no U.S. imports during that same period in the previous year. Imports from China for September 2016 through April 2017 were one seventh last year s level. Page 8 31
Brazil Dry Bean Imports, Sept. 2016 Apr. 2017 vs. Sept. 2015 Apr. 2016 (MT) 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 World Argentina United States China Bolivia Canada Sep 2016 Apr2017 Sep 2015 Apr2016 Source: Global Trade Atlas Brazil Dry Bean Imports, Sept. 2016 April 2017, by Month (MT) 70000 60000 50000 40000 30000 20000 10000 0 09/2016 10/2016 11/2016 12/2016 01/2017 02/2017 03/2017 04/2017 World Argentina United States China Bolivia Source: Global Trade Atlas U.S. Dry Bean Exports to Brazil by Type (MT) 14000 12000 10000 8000 6000 4000 2000 0 2011/12 2012/13 2013/14 2014/15 2015/16 Sep AprSep Apr 2016 2017 Blacks Pintos Cranberry Other Kidneys Source: FAS GATS Page 9 31
Colombia Record U.S. Imports in 2015/16; Domestic Supplies Rebound in Late 2016 Early last year there was a dry bean shortfall, which led to a governmental decree allowing dry beans from all origins to be imported duty free from March through June, 2016. Last summer, Colombia started to recover from two years of severe drought and domestic dry bean production rebounded. Domestic supplies substantially increased in the second half of 2016 and at this point supplies continue to be high, which has put a damper on prices and decreased import demand. As a result, U.S. dry bean exports to Colombia dropped off compared to the same period last year for most bean types. Yet, the U.S. has a stronger position in the market than it did prior to 2014/15 and there is demand for U.S. cranberry beans and for several other types of beans that are typically imported. 14000 12000 10000 8000 6000 4000 2000 U.S. Dry Bean Exports to Colombia Main Types, in MT 0 2011/12 2012/13 2013/14 2014/15 2015/16 Sep Apr 2016 Sep Apr 2017 Source: FAS GATS LRKB Cranberry Pintos Small Reds DRKB Other Navy Blacks Pricing Prices are down significantly compared to a year ago. After a period of shortfall, domestic production picked up last summer and Colombia s bean traders and packagers began purchasing more local product and reduced imports. However, prices for white cargamanto beans (similar to but larger than cranberry beans) increased by 74% from April to May this year and remained firm in June at the completion of the harvest in Meta Department. Page 10 31
Colombia Dry Bean Prices, as Reported by DANE (USD/MT) Bean Type Market Jun 23, 2017 1 month ago 4 months ago 1 year ago Bolon Bogota $1,470.20 $1,514.70 $1,551.97 $2,562.09 Nima Calima (Similar to DRKB) Bogota $1,298.01 $1,168.83 $1,261.24 $1,908.50 Radical (Similar to Small Red) Bogota $1,152.32 $1,079.97 $1,142.21 $1,960.78 Zaragoza (Similar to LRKB) Barranquilla $1,411.59 $1,593.64 $1,495.08 $1,491.83 Chickpea (Imported) Medellin $1,642.38 $1,681.48 $1,801.26 $1,267.97 Black eye bean (Imported) Barranquilla $1,072.19 $1,110.05 $1,146.42 $1,331.70 Black eye bean (Domestic) Cartagena $1,026.49 $1,059.47 $1,211.38 $1,168.30 Red Cargamanto (Similar to Red Speckled) Medellin $1,763.25 $1,777.17 $1,527.39 $2,598.04 White Cargamanto (Similar to Cranberry) Medellin $2,582.78 $2,734.11 $2,124.30 $3,121.90 Source: Colombian Statistics Department (Departamento Administrativo Nacional De Estadística, DANE). Prices expressed in COP/kg and converted to USD/MT U.S. Dollar to Colombian Peso One Year Exchange Rate Source: xe.com Sabor USA and Frijol Americano Promotions Sabor USA is a U.S. Embassy, Bogota promotion that publicize the quality of U.S. food products and how to prepare them in combination with local ingredients. Sabor USA declared May 2017 Bean Month and featured the following information on its website in an interactive and innovative way, including information from and links to the USDBC website: Bean based recipes, including 4 recipe videos. Videos reached 747,290 people. Total video views: 218,000. Videos of how U.S. beans are planted and harvested. Information about brands and retailers where American beans can be found. Health and nutritional benefits associated to dry beans. Page 11 31
Chocolate and pinto bean brownies The video had 30,000 views, reached 117,987 people, obtained 74 likes and was shared 38 times. American Pinto Bean quesadillas The video had 74,000 views, reached 242,795 people, obtained 198 likes and was shared 101 times. Burgers with American black beans The video had 54,000 views, reached 180,602 people, had 118 likes and was shared 70 times. Page 12 31
American red bean tabbouleh The third video had 60K views, reached 205,906 people, obtained 215 likes and was shared 157 times. Other posts on Facebook reached 118, 099 people. The campaign also featured exclusive content on SaborUSA s Twitter and Instagram accounts. Chile FAS GATS data show that from September 2016 through April 2017, the U.S. exported 1,490 MT of dry beans to Chile, up 32% from the same period last year. Breaking down bean exports by type, FAS GATS showed an additional 970 MT were exported under HS Code 713391100 (Bean SD, Other). Source: Global Trade Atlas Page 13 31
3000 U.S. Dry Bean Exports to Chile, Main Types (MT) 2500 2000 1500 1000 500 0 2011/12 2012/13 2013/14 2014/15 2015/16 Sep Apr 2016 Pintos Other G Nhtrn Blacks Sep Apr 2017 Source: FAS GATS According to the Chilean National Statistics Institute (Instituto Nacional de Estadisticas, INE), 2016/17 area under dry beans in Chile will decline by 3% from last year to 10,818 hectares. Chilean crop year is from May 1 through April 30. Source: Instituto Nacional de Estadisticas (INE) in MT Page 14 31
Central America and the Caribbean Market Overview In Central America, red bean supply will be higher than last year as the producing countries (Honduras, El Salvador and especially Nicaragua) report good harvests. Problems with black bean supply persist in Costa Rica and to a lesser degree in Guatemala, where Petén s harvest is complete. The June 2017 UN Food and Agriculture Organization s GIEWS Food Price Monitoring and Analysis (FPMA) Bulletin reported that prices of red beans were generally stable and below their levels a year earlier in El Salvador and Honduras, reflecting ample supplies from the 2016 harvests and imports. In Nicaragua prices continued to decline in May with good supplies from the recent third season harvest. In Costa Rica retail prices of red and black beans remained relatively unchanged in May and there were adequate supplies from local harvest and imports from the United States and Nicaragua. In Guatemala, which mainly produces and consumes black beans, prices increased seasonally in May and were 8% higher than last year. In Haiti prices of red and black beans remained generally stable, while in the Dominican Republic, prices declined slightly following seasonal trends and were around or below their year earlier levels. Once the January through March prohibition on dry bean imports ended, U.S. dry bean shipments started arriving in the Dominican Republic. In March and April, 6,437 MT of U.S. dry beans were shipped. We expect strong buying to continue as importers want to have sufficient supplies by the end of December in case the government once again bans imports in the first three months of 2018. Nicaragua Nicaragua is the main dry bean exporter in Central America and 95% of the country's dry bean production depends on small and mid scale farmers. Average production is around 180,000 MT while domestic demand usually reaches roughly 122,000 MT. Apante Harvest Outlook After several years of poor harvests due to drought, this year s Apante season harvest (which ended by May and is the largest crop of the year) was a success. A report by the National Union of Farmers and Ranchers estimated 90,744 MT and Nicaraguan traders believe it is 10 15% higher. The Nicaraguan Central Bank pegged dry bean production for 2016/17 at 4.4 million cwt (200,000 MT), up by 37.5% from last year. Costa Rica, El Salvador and Honduras heavily depend on the output of the Nicaraguan Apante season to meet domestic demand of red beans. Recent wholesale prices were $867/MT for dark red beans (tinto) and $885/MT for red beans (rojo seda). Page 15 31
Nicaragua Dry Bean Prices at Wholesale (USD/MT) Bean Class 26 Jun 17 One month ago 3 months ago 6 months ago 1 year ago Red bean (Tinto) $866.70 $811.38 $938.19 $902.97 $999.72 Red bean (Rojo) $885.14 $848.26 $938.19 $902.97 $999.72 Black bean (Negro) N/A N/A N/A N/A $884.37 Source: SIMPAH U.S. Dollar to Nicaraguan Cordoba One Year Exchange Rate Source: xe.com El Salvador U.S. black bean exports to El Salvador in September 2016 April 2017 were up 83% compared to the same period last year at 2,800 MT, showing a growing opportunity for U.S. black beans within the Salvadoran bean processing sector. Page 16 31
3000 U.S. Dry Bean Exports to El Salvador by Type (MT) 2500 2000 1500 1000 500 0 2011/12 2012/13 2013/14 2014/15 2015/16 Sep Apr 2016 Source: FAS GATS Blacks DRKB Small Reds LRKB Sep Apr 2017 El Salvador Dry Bean Prices at Wholesale (USD/MT) Bean Type 23 Jun 17 1 month ago 3 months ago 6 months ago 12 months ago Rojo Seda Red Bean (Imported) $1,187.96 $1,141.67 $1,161.51 N/A $1,353.20 Rojo Seda Red Bean (El Salvador) $1,280.52 $1,302.56 $1,309.18 $1,146.08 $1,326.53 Tinto Red Bean (Imported) $1,110.82 $1,055.72 $1,084.37 N/A $1,284.32 Tinto Red Bean (El Salvador) $1,117.43 $1,106.41 $1,106.41 $1,013.84 $1,166.55 Source: Salvadoran Min. of Agriculture. Prices expressed in USD/cwt and converted to USD/MT Guatemala Due to problems with the Postrera harvest in November December 2016, the Guatemalan Government announced a duty free quota for 5,000 MT of black beans through December 31, 2017 (all WTO members eligible). U.S. dry bean exports to Guatemala in 2016/17 MY continued at a good pace (up by 61% from last year to 2,490 MT between September 2016 April 2017). Page 17 31
8,000.00 7,000.00 6,000.00 5,000.00 4,000.00 3,000.00 2,000.00 1,000.00 U.S. Dry Bean Exports to Guatemala, by Bean Type (MT) 0.00 2011/12 2012/13 2013/14 2014/15 2015/16 Sep Apr 2016 Blacks Small Reds Pintos Other Kidneys Navy Sep Apr 2017 Source: FAS GATS Guatemala Dry Bean Prices at Wholesale, as Reported by MAGA (USD/MT) Bean Class June 22, 2017 1 month ago 3 months ago 6 months ago 12 months ago Black beans $1,288.42 $1,252.85 $1,229.32 $1,322.40 $1,178.89 Red beans $1,458.31 $1,766.51 $1,683.00 $1,234.24 $1,167.94 Source: Guatemalan Ministry of Agriculture U.S. Dollar to Guatemalan Quetzal One Year Exchange Rate Source: xe.com Page 18 31
Costa Rica Increased Duty Free Quota for Dry Bean Imports Costa Rica's dry bean production usually covers 26 to 31% of the country's demand, estimated at 47,000 MT. Weather events in late 2016 (mainly Hurricane Otto) reduced bean production significantly for 2016/17: CNP estimated 8,720 MT compared to 14,178 MT in 2015/16. The regular import tariff for beans is 30%, but under DR CAFTA the 2017 tariff for U.S. dry beans is 9.2% and will be reduced to zero by 2020. Costa Rica has a trade agreement with China that permits 10,000 MT of dry beans to enter duty free each year. The China quota plus domestic production is typically not enough to cover domestic demand. Thus, each year the Government can declare a shortfall and set a quota for additional duty free imports of dry beans (reds and blacks) from any origin. The shortfall quota for this year was previously established at 9,432 MT. In late March the government added 4,819 MT of red and black beans to the shortfall quota, which was divided between 15 importers (shown on the chart below). All allocations were valid until June 30, 2017. According to CNP sources, the 14,251 MT were already imported. New allocations should soon be announced for 2017/18. Government s Duty Free Dry Bean Import Allocations in Costa Rica (MT) Company Name Allocated Volume CC Inversiones Agroindustriales 405.47 Comercializadora Internacional de Granos Basicos 161.37 Comercios El Barreal 178.84 Compañía Arrocera Industrial 342.26 Compañía Nacional de Granos 85.31 Cooperativa de Productores Independientes de Liberia 136.18 Corporacion de Compañias Agroindustriales CCA 1,378.79 Corporacion Frijol Cinco Mil 30.32 Distribuidora El Armenio 299.60 Empaques Agroindustriales 664.99 Kani Mil Novecientos Uno 657.79 La Maquila Lama 418.31 Mercadeo de Articulos de Consumo 18.50 U.S. Dry Bean Exports to Costa Rica Total U.S. dry bean exports to Costa Rica for September 2016 through April 2017 were 7,501 MT compared to 500 MT during the same period last year. The chart below also shows (in blue) an additional 1,204 MT that was exported under HS Code 713391100 Bean SD, Other. Page 19 31
U.S. Dry Bean Exports to Costa Rica, by Bean Type (in MT) 10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 2011/12 2012/13 2013/14 2014/15 2015/16 Sep Apr 2016 Sep Apr 2017 Other Blacks G Nhtrn Navy Small Reds Other Kidneys Source: FAS GATS Pricing Since the beginning of this year, and most notably since March, the value of the CR Colon fell against the USD. Prices for both black and red beans have slightly declined since April. Costa Rica Dry Bean Prices at Wholesale (USD/MT) Bean Type Jun 26, 17 1 month ago 3 months ago 6 months ago 1 year ago Black Bean $1,656 $1,679 $1,639 $1,597 $1,542 Red Bean $2,085 $2,028 $2,052 $2,069 $2,152 Source: CNP. All prices in COP/kg and then converted to USD/MT. U.S. Dollar to Costa Rican Colon One Year Exchange Rate Source: xe.com Page 20 31
Panama U.S. Dry Bean Exports to Panama Total U.S. dry bean exports to Panama for September 2016 through April 2017 were 3,327 MT, up by 97% from the same period last year. This sharp increase was motivated by a poor domestic harvest in in Chiriquí. Light red kidney beans (1,603 MT) and pink beans (768 MT) were the two most popular types exported to Panama. 4000 U.S. Dry Bean Exports to Panama, by Bean Type (in MT) 3500 3000 2500 2000 1500 1000 500 0 2011/12 2012/13 2013/14 2014/15 2015/16 Sep Apr 2016 Sep Apr 2017 LRKB Other Kidneys Pinks Navy Blacks Small Reds Cranberry Vigna Mungo Beans Source: FAS GATS Dominican Republic USTR and DR Government Discussing Implementation of DR CAFTA Dry Bean Provisions Under DR CAFTA, in 2020 TRQs will end and there will be no quantitative limits or tariffs on U.S. dry bean imports into the DR. Dominican Republic Government restrictions on dry bean, rice and powdered milk imports and its administration of the import licensing system are two Page 21 31
challenges to full implementation of DR CAFTA. On June 1 and 2, USTR and FAS met with the DR government to discuss these issues. Here is a summary of the outcome of those discussions and next steps: 1. By July 5, 2017, the DR Government said it would retract the December 28, 2017 Resolution No. 8/2016, which limited imports of beans and TRQs of rice and powdered milk to seasonal terms for Calendar Year 2017. While the impact of this resolution on dry beans is past (January through March 2017 prohibition on dry bean imports), apparently it is still relevant for the other two commodities. 2. The Dominican Republic will provide a proposal on how to move forward on TRQ implementation for the remaining implementation period of the Agreement. The USTR and FAS will review the proposal and provide feedback and will seek input from affected parties, including USDBC, in the process. 3. FAS and USTR reiterated their concerns about the Dominican Republic s practice of issuing Import Authorization Letters (Autorizacion de Importaciones) on a case by case basis, requiring signature by the Minister of Agriculture, which slows the process and effectively places limits on imports of dry beans and other sensitive agricultural goods. FAS noted, As is the case with the TRQ administration, we have received numerous complaints from importers over the non transparent and unpredictable process for securing an import authorization. USDBC has heard those concerns, as well, from dry bean importers. 4. The Ministry of Agriculture informed USTR and FAS that a new digitized import certificate procedure for agricultural imports will be piloted in July and operational by 2018. Approvals would be automatic, without the need for the Minister of Agriculture s signature. USTR and FAS asked to be kept up to date on the progress of this system so they can keep importers of U.S. products informed. 5. The timing of these discussions and identifying appropriate solutions is important since the USTR and Commerce Department plan to complete their review of the implementation of Free Trade Agreements in October 2017. Imports Under DR CAFTA, in calendar year 2017 the TRQ for duty free entry of U.S. dry beans is 14,720 MT and the over quota duty is 17.8% (applies up to 33,856 MT). This year, Dominican buyers were actively seeking U.S. beans for delivery after the DR Government s January March 2017 dry bean import ban expired. As a result, U.S. bean shipments in March April were 6,437 MT compared to zero in February. Anticipating that the DR government will impose another dry bean import ban from January through March 2018, buyers aim to import as much as they before the end of 2017 and the U.S. is the main dry bean supplier to the country. Pinto bean June prices are down compared to one month and three months ago (3% and 16% respectively). Black bean prices remained fairly steady. Page 22 31
45,000.00 40,000.00 35,000.00 30,000.00 25,000.00 20,000.00 15,000.00 10,000.00 5,000.00 0.00 U.S. Dry Bean Exports to the DR, by Type (MT) 2011/12 2012/13 2013/14 2014/15 2015/16 Sep Apr 2016 Sep Apr 2017 Pintos Blacks Cranberry Bean SD, Other G Nthrn Bean SD, Gram Small Reds Source: FAS GATS Note: FAS GATS reports that 9,210 MT of beans were exported from September through April 2017 under HS Codes 713311000 and 713391100, which are Bean SD, Gram and Bean SD, Other respectively. This could be misclassified black or pinto bean exports into the Dominican Republic. Consequently, dry bean exports to the DR may actually be 27,080 MT instead of 17,983 MT reported by FAS GATS. In calendar year 2016, the Ministry of Agriculture reported 45,121 MT of dry beans were imported and that the United States supplied 79% of the imports. Importers and producers told us that they do not expect import needs to decrease in calendar year 2017. Dominican Republic Dry Bean Prices at Wholesale (USD/MT) Bean Type Jun 23, 2017 1 month ago 3 months ago 6 months ago 1 year ago Cranberry bean (Yacomelo) $1,819.17 $1,772.53 $1,895.91 $1,801.12 $1,540.25 Red bean (Jose Beta) $2,005.76 $2,005.76 $2,085.51 $2,085.51 $1,973.44 Black bean (Arroyo Loro Negro) $1,585.95 $1,585.95 $1,564.13 $1,564.13 $1,540.25 White bean (Anacaona) $2,005.76 $1,959.11 N.A. $2,085.51 $1,684.65 Pinto bean (Imported) $1,632.59 $1,679.24 $1,895.91 $1,943.31 $1,540.25 Source: Dominican Min. of Agriculture. Prices reported in DOP/cwt and converted to USD/MT. The duty free TRQ is incrementally increasing from 8,560 MT in 2006 to 15,840 MT by 2019, and in 2020 there are no longer any duties on U.S. dry bean imports. The over quota duty started at 83% in 2006, will drop to 5.9% by 2019 and then phase out in 2020. Currently, the DR Government uses a licensing process to allocate the TRQs. Those licensing decisions, as well as the administration of over quota duties, are not fully transparent. The Government has also taken various actions to limit, and in 2017 to prohibit, dry bean imports during the domestic harvest season, January March. Page 23 31
TRQ Quantity and Over Quota Duty under DR CAFTA, 2012 2020 Dry Bean Production During the USDBC March 2017 trade mission to the DR, farmers in the San Juan Valley, the predominant dry bean growing area in the country, told us that yields are not improving because of production and financing challenges and area under dry bean cultivation is dropping as farmers turn to other crops. Yellow mosaic virus is a continual problem and they were not aware of programs to reduce whitefly outbreaks and control infestation, although the government reportedly has such programs and the IDB is supporting a project to improve dry bean production in San Juan. Farmers rely heavily on pesticides, with some farmers reporting that they spray five times a season. 70,000 60,000 50,000 40,000 30,000 20,000 10,000 DR Dry Bean Production and Imports (MT, Calendar Year) 0 2,012 2,013 2,014 2,015 2,016 Imports Production Sources: Dominican Ministry of Agriculture for Imports and Consumption (except 2016). USDBC estimates of production are calculated by subtracting total imports from domestic consumption. USDBC estimates on 2016 consumption are based on four year average. Page 24 31
U.S. Dollar to Dominican Peso One Year Exchange Rate Source: xe.com Jamaica Production and Consumption Light red kidney beans (LRKB) are one of the traditionally consumed beans in Jamaica. People are less familiar with dark red kidney beans and associate the dark color with aging, hardness and long cooking time. Domestic light red kidneys are typically consumed fresh, within a couple months of January March harvest. A variety of other beans are also consumed, including U.S. type small red beans. LRKB production doubled between 2007 and 2013, but since then has somewhat declined, as shown in the chart below. Production levels increased as the number of hectares planted increased and dropped in years when harvested hectares fell. Productivity has been stagnant with slight variation from year to year, suggesting little investment in improved farming practices or technologies. Jamaican Red Kidney Bean MT Production & Hectares Harvested, 2007 2016 Estimates 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Production (MT) 544 506 768 682 905 986 1069 919 963 1039 Area (ha) 516 468 678 630 792 865 927 848 897 937 Yield (MT/ha) 1.05 1.08 1.13 1.08 1.14 1.13 1.15 1.08 1.07 1.11 Source: Jamaican Agricultural Marketing Information Division, Min. of Agriculture & Fisheries Page 25 31
Imports Jamaica is the largest buyer of U.S. small red beans. In 2015/16, the U.S. exported 3,739 MT of dry beans to Jamaica; 82% were small red beans and the remainder were pinto beans. Total U.S. exports from September 2016 through April 2017 were down by 35% compared to the same period last year. Belize has increased production of small red beans and as a CARICOM member can sell them to Jamaica duty free, while U.S. beans are subject to a 40% tariff. At first, the beans were small, but now they are larger and better quality and are competing with U.S. small red beans. For LRKB, the U.S. is not competitive since total import tariff and duties on non CARICOM red kidney beans imports of 89.325%. Belize is a CARICOM member and exports to Jamaica dutyfree. Until four years ago, the government would waive the import duties on red kidney beans from October to December because Belize s LRKB supply would diminish by September. Belize now has the capacity to supply LRKB year round and the Jamaican Government has not been waiving duties on non CARICOM countries in order to meet demand. 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Belize's Dry Bean Exports to Jamaica, in MT 2012 13 2013 14 2014 15 2015 16 Sept 15 Mar 16 Source: Global Trade Atlas (HS Code 071333) Sept 16 Mar 17 6,000.00 U.S. Dry Bean Exports to Jamaica, by Bean Type (MT) 5,000.00 4,000.00 3,000.00 2,000.00 1,000.00 0.00 2011/12 2012/13 2013/14 2014/15 2015/16 Sep Apr 2016 Source: FAS GATS Small Reds Pintos DRKB LRKB Navy Blacks Sep Apr 2017 Page 26 31
Haiti U.S. dry bean exports to Haiti between September 2016 and April 2017 were 4,602 MT, 60% down compared to the same period in MY 2015/16. U.S. Dry Bean Exports to Haiti, by Bean Type 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 2011/12 2012/13 2013/14 2014/15 2015/16 Sep Apr 2016 Pintos Blacks Other Navy Cranberry Sep Apr 2017 Source: FAS GATS Page 27 31
USA Worldwide Dry Bean Exports U.S. dry bean exports in April 2017 stood at 26,387 MT, down by 32% from April 2016 s 38,781 MT. Top five destinations were Mexico (7,109 MT), Canada (4,349 MT), Italy (3,101 MT), Dominican Republic (1,864 MT) and UK (1,596 MT). From September 2016 through April 2017, U.S. dry bean exports worldwide were down 10% compared to the same period last year at 260,614MT. Top 20 U.S. Dry Bean Export Markets, 2011/12 to 2016/17 (MT) 450,000.00 400,000.00 350,000.00 300,000.00 250,000.00 200,000.00 150,000.00 100,000.00 50,000.00 0.00 2011/12 2012/13 2013/14 2014/15 2015/16 Sep Apr 2016 Sep Apr 2017 Mexico Canada United Kingdom Dominican R. Italy Haiti Colombia France Japan Belgium Australia Angola Jamaica Turkey Panama South Africa Spain Guatemala Hong Kong Tanzania Source: FAS GATS Page 28 31
Top 15 U.S. Dry Bean Import Markets, 2011/12 to 2015/16 (MT) 160,000.00 140,000.00 120,000.00 100,000.00 80,000.00 60,000.00 40,000.00 20,000.00 0.00 2011/12 2012/13 2013/14 2014/15 2015/16 Sep Apr 2016 Sep Apr 2017 Canada Mexico China Nicaragua India Thailand Peru Argentina Burma Australia Ethiopia Brazil Bolivia Nigeria Belize Source: FAS GATS Page 29 31
Global View World Dry Bean Exports, By Marketing Year (Value, MT x1000) Source: Global Trade Atlas and FAS GATS Page 30 31
Global View World Dry Bean Imports, By Marketing Year (MT x1000) Source: Global Trade Atlas and FAS GATS Page 31 31