By: Kurt Shultz, U.S. Grains Council director of the Americas

In recent years, Venezuela has surpassed Colombia and the Dominican Republic to become one of the largest markets for U.S. corn. Venezuelan grain importers make purchasing decisions based on necessity, access to foreign currency and exchange rates. As a result, U.S. corn exports to Venezuela soared to 2.4 million metric tons (94.5 million bushels) in 2012 because the United States is a reliable and efficient supplier of grains. However, U.S. dominance in this market is beginning to be challenged by corn exports from South America.

Venezuela’s joining the Mercosur trading block in June 2012 impacted U.S. corn exports to Venezuela. Mercosur includes Brazil and Argentina, two major corn exporting countries, which now have tariff advantages on corn exports to Venezuela over the United States. The duty on Mercosur corn imports is 8 percent whereas the duty U.S. corn is 15 percent.

Traders estimate that this will erode U.S. market share in Venezuela. As the industry is currently structured, however, it is unlikely that the market will entirely switch to South American corn. Venezuelan importers presently do not have much time to shop for the best price. When they import they are forced to move quickly and the United States is only five days sail rather than the 15 days from South America.

U.S. corn exports to Venezuela will continue due to the proximity and ease of originating out of the United States, but the doors for competition are opening. The Council needs to be engaged in this market to ensure that the United States’ marketing advantages are maximized to protect our market share in Venezuela.