Mexico Increases its Corn Imports on its Non-GMO Path

Published Dec 10, 2021

For the first ten months of 2021, Mexico imported a total of 14.62M MT of corn, up 7.2% compared to the 13.64M MT imported in the same period of 2020, according to the latest report from Grupo Consultor de Mercados Agricolas (GCMA). According to preliminary estimates, the country is expected to import a total of 17.86M MT of corn in 2021, which would be an increase of 13.10% from the previous year. Mexico entered a three-year phase-out timeline for GMO corn imports in its path to achieve self-sufficiency. However, this year’s surge in corn imports has left plenty of doubts about satisfying Mexican demand without GMO supplies.

Mexico is already largely self-sufficient in white corn but depends on imports of mostly Genetically Modified Organism (GMO) yellow corn from the US for livestock feed. Because of this, the fact that Mexico increased by 50% imports of white corn over the first ten months of the year this year has the corn processors in Mexico extremely worried. In addition, water shortages in main producing regions have led white corn production short this year with the need to increase imports for domestic consumption.

Domestic corn production hasn't seen any growth

The Ministry of Agriculture and Rural Development (SADER) stated at the beginning of this year that Mexico will reduce GMO corn imports by 50% in 2024 as part of the Mexican government implemented a strategy to end the dependence of GMO corn import from the US. However, the data says otherwise. In the first semester of 2021, Mexico produced 6.93M MT, representing a 5.2% reduction with respect to 2020’s production in the same period.

Source: Tridge

Several factors impact the national production of corn in the country, where every agricultural cycle of production has presented losses. The harvest registered in the first half of this year barely represents the 24% progress of the year’s goal. According to John Perrin, Tridge’s representative in Mexico, white corn production in Mexico has decreased this year due to water shortages. “The state of Sinaloa in Mexico, which is one of the strongest producers and the main exporting region for white corn in the country is reporting a decrease of planted crops as much as 100,000 hectares this year due to shortage of water, forcing farmers to minimize production and move to less water demanding crops”, he reported.

Domestic corn production for 2022 is expected to reach 28.42M MT, up 2.5% from this year's 27.57M MT estimate, with much of the gains expected to come from better weather conditions. Therefore to accomplish the government’s goal and the current president’s campaign promise, corn production needs to increase gradually from now to 2024.

Far from Achieving Food Sovereignty in Yellow Corn

Corn imports in Mexico have grown a substantial 20% since 2012 as the food industry has increased its domestic production and has used corn as the primary source for their food process chains. To fulfill this, Mexico depends on imports of mostly Genetically Modified Organism (GMO) yellow corn, mainly from the US, which accounts for 93% of all imports. The 7% rest comes from South America, mainly Brazil, Argentina, and Chile.

According to the GCMA report, Mexico imported 13.31M MT of yellow corn from the US in the January to October period, up 11.5% compared to imports of 11.94M MT in the same period last year. In the case of white corn, a total of 745K MT were imported from the US, an increase of 50% compared to 496.7M MT from last year. Besides this year’s increase in corn imports, the US’s GMO corn dependency has also increased over the stated period. Corn imports from South America have decreased by 58% to 441K MT compared to 1M MT the year before.

Source: Tridge, ITC Trade Map

While Mexico’s white corn production of around 25 M MT a year is barely enough to satisfy industrial demand, mainly for tortillas, yellow corn production remained at an approximate 3.1 M MT per year. According to the Agrifood and Fishing Services in Mexico (SIAP), white corn production is estimated to recover in 2022, increasing 11.7% to 3.35 M MT after better weather conditions are expected for that year. However, SIAP also estimates that the domestic consumption for yellow corn is an average of 18M MT per year, for which more than 70% of it is used for livestock feed.

It is still unclear whether the decree will phase out imported GMO corn for livestock or whether the ban will apply only to corn grown for human consumption. For Mexico to achieve self-sufficiency on yellow corn, it would need to increase its domestic production from 3.35M MT to 18M MT. However, if by 2024 it aims to eliminate only GMO corn usage for human consumption, it would need to produce at least an estimated 5.4M MT. Thus, allowing GMO corn for livestock only seems to be a more feasible option for the corn industry in Mexico.

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