Mexican politicians are sabre rattling against the US agriculture
sector, and it looks like Argentina is ready to fill the gap.
But analysts are sceptical as to whether a proposed corn import
ban, which is to be debated this week, is a serious threat.
On Sunday the Mexican senator Armando Rios Piter, who leads
a congressional committee on foreign relations, says he would introduce a bill this
week, to shift corn import demand to Brazil and Argentina instead of the United
"I'm going to send a bill for the corn that we are
buying in the Midwest and...change to Brazil or Argentina," Mr Rios Piter told
A lesson in unintended
"Mexican politicians are toying with the idea of buying
their corn from South America instead of the US to teach the US President a lesson
in unintended consequences," said Tobin Gorey, at Commonwealth Bank of
But Terry Reilly, at Futures International, said "we believe
the 'rogue one' senator introducing the bill will not succeed.
And it is true that so-far there are no signs that Mr Rios
Piter has the support to pass the legislation, which would inevitably tighten
South American grain markets, and increase prices.
On Wednesday Marisa Bircher, Argentina's secretary of
agroindustrial markets, told the newswire Reuters that the country hopes to
increase exports to Mexico.
Argentina exported less than 100,000 tonnes of corn to
Mexico last year.
"Corn is obviously a sector that is on the list to have
greater access and gain a bit more space for Argentina, regardless of the
presence of the US market," Ms Bircher said.
Ms Bircher said there was also potential for poultry and
beef exports to Mexico.
"Argentina is seeking closer relations with Mexico to fill
their needs for corn as President Trump seeks to renegotiate trade agreements,"
noted Paul Georgy at Allendale.