Council’s Outreach Eliminates Technical Barrier To Corn Exports To Guatemala

Inefficiencies in discharging U.S. corn at the port of Guatemala added costs to importing
grain from the United States. Guatemalan authorities required unnecessary fumigation
on U.S. corn before discharging it from the vessel. This added a financial burden to grain
importers and caused downstream costs associated with unnecessary storage and
demurrage.

In response to this issue, the Latin America regional office of the U.S. Grains Council
partnered with the main grains terminal in Guatemala, Terminal de Granos del Pacifico
(TERPAC), to train a team of officials from the Guatemalan port about the U.S. export
system, build a stronger relationship between the industry and Guatemalan regulators
and ultimately reduce the need for fumigation of U.S. grain shipments upon arrival in
Guatemala.

Guatemala is the largest importer of U.S. corn in Central America. In the 2020/2021 marketing year, the U.S. exported 1.2 million metric tons (MMT) (47 million bushels) of corn worth $297 million to Guatemala. Addressing the difficulties that
end-users and importers face at the destination port improves overall efficiency and eliminates unnecessary costs that
would otherwise result in food inflation for the consumer.

In late 2019, the Council hosted ten government officials and two TERPAC representatives on a trade facilitation mission to
the United States. The team learned about the U.S. export system from the farmer
through the export channels to the export elevators. Through each step of the export
channel, the team learned about the quality assurance procedures in place. The
program demonstrated the reliability and transparency of the marketing channel and the
role of the government and independent surveyors in ensuring grain quality upon export.

Before the mission, TERPAC reported that Guatemalan authorities were reluctant to
trust U.S. fumigation certificates, and there was also a breakdown in communications
between private sector importers and government inspectors. However, after the
program, the authorities became more willing to engage with their customers. Most
importantly, the amount of grain subject to additional fumigation at the destination
decreased. Cargo retained for fumigation at destination declined from 90 percent in 2019
to 25 percent in 2020 and five percent in 2021.

When additional fumigation is required, it adds 0.52 cents per metric ton to the final
costs of importing. Work to reduce these costs translated to a savings of approximately
$544,000 per year solely for corn imports. The Council invested $47,082 of Market
Access Program (MAP) funds in the training program, resulting in a savings of $544,000
per year for its Guatemalan customers, which can be invested in expanding facilities or
reducing costs for the Guatemalan consumer.