Highlights

Corn Production forecast is down to 950,000 metric tons (MT) in marketing year (MY) 2017/18. Corn imports are forecast slightly lower to 2 million MT. Production of rice is forecast to decline further from the previous year to 310,000 MT in MY 2017/18 with imports also falling to 390,000 MT. Rice exports will remain at 50,000 MT in MY 2017/18. Imports of wheat and consumption are forecast down to 1.2 million MT and 1.1 million MT in MY 2017/18.

Executive Summary

The Venezuelan economy contracted 10% with triple digit inflation in 2016. Inflation is expected to explode in 2017 to 1,660%. Oil prices remain low, decreasing foreign exchange cash flow and limiting imports of essential agricultural inputs and raw materials, such as seeds, fertilizer, pesticides, equipment and machinery. A 2017 diesel shortage is also detrimentally impacting the early 2017 planting season, reducing area planted and production for rice and corn. The Government of the Bolivarian Republic of Venezuela (GBRV) maintains strict controls of foreign exchange. Venezuela is heavily dependent on imported agricultural raw materials and imports are managed exclusively by GBRV public corporations that purchase about 80% of all agricultural product imports. GBRV oil revenue cash flow shortfalls to purchase imported wheat and corn result in most feed and flour mills producing at about 54 % of capacity with processing line disruptions lasting for days as inventories are stretched to the last grain.

Corn

Production:

Corn is Venezuela’s main crop by area, falling to 380,000 hectares of area planted in MY 2017/18. About 55% of corn produced in Venezuela is white corn for human consumption and the remainder is yellow corn for both human consumption and for feed manufacturing. Domestic corn production in MY 2017/18 corn is forecast to fall to 950,000 MT due to a severe lack of inputs and old equipment in dire need of upgrades/repairs. Production will be insufficient to fulfill total demand for feed and food uses. Thus, imports will be necessary in MY 2017/18.

Consumption:

Overall, the demand for feed grains in Venezuela is down as poultry producers are adjusting feeding operations under very limited supply and inventories. The Post total consumption forecast is down to 3.15 million MT in MY 2017/18. The feed and residual consumption forecast remains at 1.6 million MT for MY 2017/18. Food, seed, industrial (FSI) consumption is also forecast down to 1.5 million MT for MY 2017/18.

Trade:

Total corn imports for MY 2017/18 are forecast up to 2 million MT. The GBRV remains as the primary importer of critical agricultural raw materials, but deliveries can be unreliable. Private sector imports are occurring, but in very limited volumes.

Production, Supply and Demand Data Statistics

Corn

2015/2016

2016/2017

2017/2018

Market Begin Year

Oct 2015

Oct 2016

Oct 2016

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

400

400

400

400

0

380

Beginning Stocks

433

433

283

383

0

273

Production

1150

1150

990

1000

0

950

MY Imports

1800

2100

2200

2190

0

2050

TY Imports

1800

2100

2200

2190

0

2050

TY Imp. from U.S.

1080

0

0

0

0

0

Total Supply

3383

3683

3473

3573

0

3273

MY Exports

0

0

0

0

0

0

TY Exports

0

0

0

0

0

0

Feed and Residual

1600

1700

1700

1700

0

1600

FSI Consumption

1500

1600

1600

1600

0

1550

Total Consumption

3100

3300

3300

3300

0

3150

Ending Stocks

283

383

173

273

0

123

Total Distribution

3383

3683

3473

3573

0

3273


Commodities:

Rice, Milled

Production: The planted area forecast will decrease to 125,000 hectares in MY 2017/18. The first of Venezuela’s 2017 rice planting seasons is being disrupted by early rains from the La Niña weather phenomena. Under normal circumstances, Venezuelan farmers could plan and adjust for this inconvenience; however, the economic crisis has created scarcity of machinery parts, fertilizer and pesticides. Compounding these challenges, a recent diesel fuel shortage is limiting the use of tractors and water displacement pumps. Milled rice production in MY 2017/18 is therefore forecast down to 310,000 MT. Also, there is minimal market incentive for farmers or millers to increase planted area and production since both farm-gate and retail prices are controlled by the GBRV.

Consumption:

In general, about 90 percent of rice production is for human consumption, the remaining 10 percent is destined for animal feed. Consumption is forecast down to 660,000 MT in MY 2017/18. Domestic consumers are switching to cheaper carbohydrate substitutes, such as potatoes and plantains. Rice distributed at the GBRV regulated price is Bs. 70/kg and near impossible to find. Black market prices are reaching Bs. 3,000-4,000/kg, increasingly unaffordable for a typical minimum wage per month around Bs. 60,000.

Trade:

The GBRV is the primary rice importer including decisions on the allocation of incoming shipments to the public and private sector mills. Some private sector mills are importing rice, but in very limited quantities. As economic conditions will likely worsen with severe foreign exchange limitations, import forecast at 390,000 MT in MY 2017/2018. Exports of Venezuelan rough rice to Colombia may occur equivalent to 50,000 MT of milled rice.

Production, Supply and Demand Data Statistics:

Rice, Milled


Rice, Milled

2015/2016

2016/2017

2017/2018

Market Begin Year

Apr 2015

Apr 2016

Apr 2016

Venezuela

USDA

New

USDA

New

USDA

New

Official

Post

Official

Post

Official

Post

Area Harvested

130

130

125

130

0

125

Beginning Stocks

97

97

57

67

0

47

Milled Production

340

340

305

350

0

310

Rough Production

501

501

449

516

0

457

Milling Rate (.9999)

6786

6786

6786

6786

0

6786

MY Imports

400

400

410

380

0

390

TY Imports

400

400

400

380

0

390

TY Imp. from U.S.

207

0

0

0

0

0

Total Supply

837

837

772

797

0

747

MY Exports

120

90

60

70

0

50

TY Exports

100

90

80

70

0

50

Consumption and Residual

660

680

665

680

0

660

Ending Stocks

57

67

47

47

0

37

Total Distribution

837

837

772

797

0

747

Sorghum

Production:

Sorghum is an important crop for dry areas in the eastern and southern regions of Venezuela, specifically in the States of Guárico and Cojedes. Sorghum production, like other grains, has been affected by the foreign exchange challenges to importing seeds, fertilizer, pesticides, equipment, and machinery. Sorghum, nevertheless, is an inferior substitute for yellow corn according to feed manufacturers, whose preference is for domestically produced, or imported, yellow corn. Sorghum area planted and production are both forecast down to 70,000 hectares and 70,000 MT, respectively.

Consumption:

Sorghum is used for poultry and swine feed production in Venezuela, and to a lesser degree forage for cattle. Feed manufacturers prefer imported corn over domestic sorghum. The total MY 2017/18 sorghum consumption is forecast down to 80,000 MT.

Sorghum


Sorghum

2015/2016

2016/2017

2017/2018

Oct 2015

Oct 2016

Oct 2016

Oct 2017


USDA


Official

New

Post

USDA

Official

New

Post

USDA

Official

New

Post

Area Harvested

90

90

90

90

0

70

Beginning Stocks

12

12

12

12

0

12

Production

90

90

90

90

0

70

MY Imports

0

0

0

0

0

0

TY Imports

0

0

0

0

0

0

TY Imp. from US

0

0

0

0

0

0

Total Supply

102

102

102

102

0

82

MY Exports

0

0

0

0

0

0

TY Exports

0

0

0

0

0

0

Feed and Residual

85

85

85

85

0

75

FSI Consumption

5

5

5

5

0

5

Total Consumption

90

90

90

90

0

80

Ending Stocks

12

12

12

12

0

2

Total Distribution

102

102

102

102

0

82


Wheat

Production:

There is no production of wheat in Venezuela and the market is entirely dependent on imports.

Consumption:

The GBRV is the primary importer of wheat, although very limited volumes are being imported by the private sector. The economic crisis and limitations on imports are creating a severe shortage of wheat, currently satisfying only about 54% of domestic demand. Bread shortages are becoming more frequent in 2017. Consumption is forecast down to 1.1 million MT in MY 2017/18.

Trade:

Imports are forecast down to 1.2 million MT in MY 2017/18. In 2016, imports were primarily sourced from Canada, Mexico, and the United States. New commercial agreements between the GBRV and Russia signed late last year suggested the possibility of Black Sea wheat entering the Venezuelan market; however, Post contacts indicate that no Black Sea wheat has arrived to date.

Production, Supply and Demand Data Statistics:

Wheat


Wheat

2015/2016

2016/2017

2017/2018

Market Begin

Market Begin Year:

Market Begin Year:

Market Begin Year:

Year

Venezuela

Jul 2015

Jul 2016

Jul 2017

USDA


Official

New

Post

USDA

Official

New

Post

USDA

Official

New

Post

Area Harvested

0

0

0

0

0

0

Beginning Stocks

202

127

77

77

0

77

Production

0

0

0

0

0

0

MY Imports

1375

1600

1300

1520

0

1200

TY Imports

1375

1600

1300

1520

0

1200

TY Imp. from US

307

0

0

0

0

0

Total Supply

1577

1727

1377

1597

0

1277

MY Exports

0

0

0

0

0

0

TY Exports

0

0

0

0

0

0

Feed and Residual

0

0

0

0

0

0

FSI Consumption

1500

1650

1300

1520

0

1100

Total Consumption

1500

1650

1300

1520

0

1100

Ending Stocks

77

77

77

77

0

177

Total Distribution

1577

1727

1377

1597

0

1277