Does ballroom dancing exist in any of the central or south american countries?

Yes, it does.

Would you be able to specify where?? I live in panama city, panama and my family/ friends from here and other latin american countries have never even heard of american/english ballroom dancing. Usually if one knows what I am talking about it is because they have seen it in the movie "baila conmigo."

Ahh, "Dance With Me" the one with Chayenne and Vanessa Williams right?

Are you looking to social dance, or to become a competitor? If you're looking to become a competitor, I'm not sure where you should start looking. Panama is not a member of the International DanceSport Federation (the body that governs amateur dancesport), so I'm guessing not many people do it in Panama yet. Columbia is a provisional member of the IDSF, but that's not going to help you in Panama City.

Is there any way to look up on the internet what central/south american countries are part of the IDSF???

.. and yes it was the movie with Chayanne and Vanessa Williams.

Yes, of course, go to the IDSF's web site at www.idsf.net and look for the page called something like Member Organizations. That's how I found out that Panama isn't a member yet.