Mexico: 50% Tariff on White Corn Depresses Export
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Mexico’s Corn production for MY 2021/2022 (October 2021-September 2022) is set at 26.5 MMT based on updated figures from SADER. The USDA revises production for 2022/2023 downward one percent to 27.4 MMT from previous reporting, reflecting lower yields, high input costs, and dry weather patterns on the Gulf Coast Corn regions.
Harvest for the MY 2021/22 winter Corn cycle ended in August 2022. Farmers in the top states for winter Corn production reported minimal losses. Despite both drought and damaging frosts in Tamaulipas, farmers reported good grain quality. The winter Corn cycle accounts for 30 percent of total Corn production in Mexico. While states such as Sinaloa and Sonora reported yields of 12.17 and 11.19 mt/ha, the average yield from the winter Corn harvest was reported to be 6.61 mt/ha. In terms of regions, Sinaloa led the harvest with 5.2 million tons from 0.4 million ha, followed by Veracruz (0.5 million tons from 0.4 million ha), Tamaulipas (0.4 million tons from 0.075 million ha), Chiapas (0.2 million tons from 0.1 million ha), Oaxaca (0.18 million tons from 0.071 million ha), and Sonora (0.17 million tons from 15,093 ha).
For the MY 2022/23 summer crop cycle, the harvest in Tamaulipas is finishing, and overall grain quality appears good. Due to an aflatoxin outbreak, a percentage of white Corn destined initially for human consumption will be used for livestock feed. In Durango, the harvest began in December and was expected to be completed by January 2023. In Chihuahua, which produces nearly seven percent of Mexico’s summer Corn, late September flood damage resulted in lowered production levels. In the Bajio region, which encompasses the states of Jalisco, Guanajuato, and Michoacán, harvest was expected to last through February 2023.
Post estimates MY 2022/23 total domestic consumption at 44.3 MMT due to a rise of slightly less than one percent in domestic feed consumption, with year-to-year food consumption static. Total consumption in MY 2021/22 is estimated at 44.1 MMT, also less than one percent higher than the previous marketing year, based on nearly unchanged food consumption levels and higher feed demand from the livestock industry, which continues to see increased investment and sustained demand for animal protein.
The USDA projects ending stocks for MY 2022/23 at 3.5 MMT, up 6 percent from ending stocks for MY 2021/22, estimated at 3.2 MMT due to higher than previously estimated imports. Post has observed record Corn sales in Mexico as some processors look to build inventory in a changing policy environment.
Mexico Corn Trade
Post’s import estimate for MY 2022/23 is 17.3 MMT. Although projected down from the record import volume for MY 2021/22, this would still represent Mexico’s second-highest annual import total on a market-year basis. Sustained growth in Mexico’s livestock sector will continue to drive feed demand upwards, thus, Corn imports. Mexico’s exports for MY 2022/23 are estimated at 200,000 MT to reflect slightly lower domestic production. Still, Mexico’s recent decision to apply a 50 percent tariff on white Corn will further depress exports.
According to AgFlow data, the United States shipped 2.1 million tons of Corn to Mexico in Jan-Feb 2023, followed by Brazil (0.2 million tons). Mexico’s imports for MY 2021/22 finished strongly at a record 18.1 MMT to reflect the latest trade data. This figure offsets the decline in MY 2021/22 domestic production from the prior year. FAS/Mexico revises estimated exports for MY 2021/22 downward to 263,000 MT, based on the latest production and trade data indicating there was lower availability of white Corn for export.
Other sources: USDA
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