The Mexican government's drive to pivot away from US corn
imports will fall flat,. at least for next season, US foreign staff said, with no shift toward
competing origins expected.
The US Department of Agriculture's bureau in Mexico City
forecast Mexican corn imports in 2017-18 flat year-on-year, at 13.40m tonnes,
thanks to moribund demand and rising production.
But the US market share will be unchanged, with all but
200,000 tonnes of imported corn sourced from Mexico's northern neighbour.
Mexican corn production is seen up 1.25m tonnes year on year,
at 25.25m tonnes next season.
Threats of Mexican
This forecast raises questions over ideas that Mexico
will be able, short term, to reduce its huge reliance on imports from the US.
"Private sources indicated that as Mexico becomes a
more attractive and sophisticated importer, some other countries that produce
yellow corn, such as Brazil and Argentina, have shown interest in exporting to
Mexico," the bureau said.
And the bureau noted recent statement from the Mexican
government "indicating that it has a strategic objective to increase
diversification of its agricultural import suppliers"
"In the longer term, this could mean that Mexico would
not rely only on US corn imports, as is currently the case," the bureau
This rhetoric has ramped up in recent months, in response to
the election of Donald Trump as US president.
Mr Trump ran in part on a mandate of renegotiating the North
American Free Trade agreement, which includes Mexico, and Canada, to gain more
agreeable terms for the US.
Last week Mexico's Economy minister Ildefonso Guajardo said
that any country-specific rules of origin within the North American Free Trade
Agreement (NAFTA) would be "totally unacceptable".
…but many doubt if
threats have teeth
The threat of a pivot away from US grain imports is seen as
a warning shot by the Mexican government, ahead of any fresh negotiations.
But many investors have shrugged off the threats, suggesting
that Mexico has only limited potential to source other supplies, given the
significant freight cost advantage enjoyed by US exporters to Mexico.
And the USDA's Mexico City bureau struck a similar sanguine
note, suggesting that "given that there have not been any changes to
policy or economic factors, it is expected that over the mid-term at least,
Mexico will remain a substantial importer of corn from the United States".