Mexico lifts ban on U.S. fresh potato imports

Published May 18, 2021

The Mexican Supreme Court voted on the 28th of April to open its entire market to fresh U.S. potatoes. After a long restricted 26-kilometer area within the U.S.-Mexico border since 2003, US fresh potatoes will finally have access to Mexico´s entire territory. The National Potato Council in the US has estimated a market potential of USD 200 million per year within five years for US fresh potato exports. The authorization to access the full Mexican market comes at a time when US potato exporters have faced plenty of challenges in the current marketing year and with strong resistance from Mexican potato growers.

Trade Limited to the Border Region

Since US potato imports were allowed into Mexico in 2003, it was restricted to 26 kilometers (16 miles) along the U.S.-Mexico border. Despite the restriction of the 26-kilometer border area, Mexico is the second-largest importer for US fresh potato exports accounting for 106,000 metric tons valued at USD 60 million in 2020. The US exported USD 245 million fresh potatoes in 2020, with Canada as its main buyer with 38% of the export share, followed by Mexico with 23.3%. Exports to Mexico, despite the area restriction, have grown substantially in value over the last few years. From the 2015-2019 period, exports grew 10% in value and 3% in volume.

Mexico ranks fifth in the world in terms of potato consumption. The annual production of potatoes in the country is 1.8 million tons and has remained the same since 2012. While the US is the biggest producer of potatoes in the American continent, as it produces an average of 20 million tons a year, it has shown interest in increasing its presence in Mexico for more than a decade. However, the National Confederation of Potato Growers of Mexico (CONPAPA) has claimed over the years that US potato imports violate the right to food and national security. The Confederation has been able to hold US imports by claiming US potatoes posed a severe risk on Mexican fields, as they contained pests that are damaging to the Mexican crop and increase the country’s food dependency.

A Long Legal Battle Ends

In May 2014, the Mexican government finally agreed to allow US potatoes full access to their market. However, immediately after this was implemented, CONPAPA sued its government, claiming Mexican regulators have no authority to decide if agricultural imports can enter the country, causing the implementation to freeze for seven years. Thus, the US National Potato Council has put political pressure over the legal process for Mexico to comply with its obligations under numerous trade agreements, including NAFTA, the WTO, and now the U.S.-Mexico-Canada Agreement (USMCA) as the restrictions have violated these agreements.

Producers associations in Mexico have supported the entry of US potatoes as well. The National Committee for the Potato Product System, which represents different producer associations from various Mexican states, has asked the federal executive to import fresh potatoes into the country. Finally, on the 28th of April, the High Court in Mexico lifted the restriction by stating that it is indeed within the federal authority to issue regulations about importing agricultural products, marking the end of a decades-long legal process.

Jim Sierra, a member of Potatoes USA and a potato grower in Idaho, told Tridge that everyone in the potato industry would benefit from the decision. “Mexican consumers and potato chip producers will have access to fresh potatoes all year round, and it will certainly have an impact on prices for the potato processing industry that hopefully will be translated to the consumer.”

Open Doors for a Whole New Market

Mexico is the third-largest export market for U.S. potatoes, including fresh, frozen, and dehydrated, importing USD 270 million in 2020. Although Mexico just imported USD 60 million worth of fresh potatoes, it imported USD 210 million on processed potato products. Mexico has been self-sufficient on fresh potatoes as consumption has remained steady over the last years, while demand for frozen potatoes has increased. Mexico’s imports of US frozen potatoes have grown by 6% over the last year, while US exports to other markets in 2020 decreased by 12% overall due to decreased demand over the pandemic.

Source: ITC Trade Map, Tridge

For Jim Sierra, the opening of the Mexican market means focusing on promoting fresh potato consumption. “Mexican consumers are not used to the fresh US produce for consumption. The Mexican potato industry has blocked US potatoes, which is a higher quality product that needs to be promoted among consumers,” he stated.

U.S. potato exports have faced a great deal of adversity in the current marketing year. Demand for frozen potato products declined precipitously in 2020, which has carried over through the first quarter of 2021. The authorization of exports to the Mexican market has come at a critical time when US exporters face a severe increase in logistics costs, container shortage, and low export volumes on their frozen and processed products. However, in order to reach that estimated USD 200 million on fresh potato exports, the industry will have to develop a market in Mexico by promoting fresh potato consumption and wider use of the product.

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