Recent political unrest in Venezuela and Ukraine has the potential to disrupt trade and are being closely monitored by U.S. Grains Council representatives in Latin America and Europe.
Venezuela is experiencing growing economic disruption and increased tension as result of an escalating confrontation between protesters and the government. While many demonstrations have remained peaceful, some have led to violent clashes with the police. Despite having the world's largest oil reserves, the country suffers from the highest inflation rate in South America and chronic shortages of food and household goods.
"Venezuela is a key importer of U.S. corn and, despite its difficulties, a valued market," said Kurt Shultz, USGC regional director of the Americas. "Lack of access to U.S. dollars and spiraling inflation mean that corn imports will take a hit, when and if, the government runs out of hard currency to pay debts. This is a real problem, not only for U.S. producers but also for our loyal customers in the country."
Meanwhile, Ukraine is experiencing similar discord.
Armed men have taken control of two government buildings in the pro-Russia region of Crimea and deposed President Viktor Yanukovych has declared himself still to be the country's legitimate leader. Yanukovych was driven from office after a week of bloodshed in Kiev that left more than 80 dead. Both developments posed serious challenges to the provisional government as it tries to consolidate control and stabilize the country.
Ukraine has become the largest corn exporter after the United States and Brazil and is projected to ship 18.5 million metric tons of corn in the 2013-2014 marketing year, more than triple the amount three years ago, according to the U.S. Department of Agriculture.
"We haven't yet seen any shutdown of exports from Odessa or any other ports on the Black Sea," said Cary Sifferath, USGC regional director of the Middle East and Africa. "But we have seen prices firm up as many farmers of all sizes are holding on to grain as inflation is hitting the local currency."
Vessels are still being loaded at Ukrainian ports but price increases may slow down future sales; as high and unpredictable inflation means grain is an effective hedge against a depreciating currency.
"Increases in Ukrainian corn prices and political uncertainty should keep U.S. corn competitive into North African markets including Egypt, Morocco, Algeria and Tunisia," Sifferath said. "We wish the Ukrainians a peaceful solution to their political crisis, but in the meantime U.S. price, quality and especially reliability are critical factors."
Venezuela is experiencing growing economic disruption and increased tension as result of an escalating confrontation between protesters and the government. While many demonstrations have remained peaceful, some have led to violent clashes with the police. Despite having the world's largest oil reserves, the country suffers from the highest inflation rate in South America and chronic shortages of food and household goods.
"Venezuela is a key importer of U.S. corn and, despite its difficulties, a valued market," said Kurt Shultz, USGC regional director of the Americas. "Lack of access to U.S. dollars and spiraling inflation mean that corn imports will take a hit, when and if, the government runs out of hard currency to pay debts. This is a real problem, not only for U.S. producers but also for our loyal customers in the country."
Meanwhile, Ukraine is experiencing similar discord.
Armed men have taken control of two government buildings in the pro-Russia region of Crimea and deposed President Viktor Yanukovych has declared himself still to be the country's legitimate leader. Yanukovych was driven from office after a week of bloodshed in Kiev that left more than 80 dead. Both developments posed serious challenges to the provisional government as it tries to consolidate control and stabilize the country.
Ukraine has become the largest corn exporter after the United States and Brazil and is projected to ship 18.5 million metric tons of corn in the 2013-2014 marketing year, more than triple the amount three years ago, according to the U.S. Department of Agriculture.
"We haven't yet seen any shutdown of exports from Odessa or any other ports on the Black Sea," said Cary Sifferath, USGC regional director of the Middle East and Africa. "But we have seen prices firm up as many farmers of all sizes are holding on to grain as inflation is hitting the local currency."
Vessels are still being loaded at Ukrainian ports but price increases may slow down future sales; as high and unpredictable inflation means grain is an effective hedge against a depreciating currency.
"Increases in Ukrainian corn prices and political uncertainty should keep U.S. corn competitive into North African markets including Egypt, Morocco, Algeria and Tunisia," Sifferath said. "We wish the Ukrainians a peaceful solution to their political crisis, but in the meantime U.S. price, quality and especially reliability are critical factors."
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