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Food Price Inflation Hits Colombia

WASHINGTON - Apr 14/20 - SNS -- Food supplies remain adequate in Colombia, but initial panic buying and hoarding by consumers after the government ordered people to quarantine and shelter in place on March 25, the country experienced significant food price inflation, according to the U.,S. agricultural attache for the country.

"After the Colombian government announcement of a countrywide lock down, people rushed to the largest wholesale markets in Bogota and Medellin to stock up essential items," the agricultural attache noted. "Despite this rush, there remain plenty of products available in these markets, but the rise in food demand has increased prices by 25% to 50% for some items such as peas, beans, potatoes, and onions among others."

In general, food remains available in the supermarkets and small shops as the agricultural sector is exempt from many of the current work and transportation restrictions. Consumer stockpiling purchases in advance of the country-wide quarantine led to increased prices and temporary shortages of some products in markets. These spot shortages continue as retailers rush to restock the shelves.

The animal feed industry, as well as poultry and pork farms, are operating normally. Domestically produced and imported meat products are moving through the supply chain. Transportation is functioning, given government instructions to permit food movement, though long-haul truckers are complaining about the lack of services en route such as restaurants and lodging. Grain importers are relieved by the government authorization to allow digital copies of documents instead of original ones to do the nationalization process.

Poultry and pork industries experienced a spike in demand due to increased buying as Colombians prepared to shelter in place. The industry is challenged to move product faster to stores in order to avoid empty shelves at supermarkets. Consumer stockpiling buying is testing the food system's production and logistical capacity in the near term, but the industry believes this to be temporary and once the customers understand they can still acquire food under lock down, the demand will return to normal.

The U.S. agricultural attache reported that Colombian affiliates of U.S. companies say they are ramping up production in the near term to meet the growing immediate demand for chicken, eggs, corn starches, and a variety of other products that need to be restocked at grocery stores. Contacts in the Colombian rice producer's federation (Fedearroz) said that the most recent harvest in February was not impacted by the crisis and there is plenty of rice in the country.

"However, the medium-term outlook for food prices is unclear with an expected loss of demand combined with increasing costs of imported products. Demand for food is expected to decline with a sharp drop in demand from the restaurant and food service sector, as people stay home.

Food retailers expect to pass the costs of the strong U.S. dollar onto consumers for imported products, raising the cost to consumers for many other products.

Colombian port inspection agencies, such as INVIMA and ICA, will accept certificates and other required documents electronically in place of a signed hard copy in order to better facilitate trade during the Covid-19 crisis. Many exporters and importers were worried about significant delays in the arrival of these documents as mail service is interrupted due to a lack of flights between countries.

Some in the Colombian food industry expressed concerns about disruptions in the supply of imported food and agricultural inputs as other countries deal with the Covid-19 outbreak. Overall, the United States is Colombia?s largest supplier of food and agricultural products. FAS Bogota is providing government and industry contacts current information from USDA and U.S. producer associations about the status of the U.S. supply chains. To date the infrastructure of functioning normally.

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