Raise in Imports of all Main Grains
Mexico started 2021 with the highest spending recorded on basic grains. In the first three months of this year, imports of grains and oilseeds reached a record 9.5 million tons, an increase of 9.2% against the 8.7 million tons imported during the same period of 2020. In January 2021, Mexico imported USD 305 million worth of corn, an increase of 34% compared to the USD 227 million for the same month in 2020. According to the Bank of Mexico, the country began this year paying 20% more for the import of corn, beans, wheat and rice, four basic grains in Mexico consumption diet, compared to the start of last year
In January 2021, Mexico imported grains equivalent to USD 476 million, when in the same month of 2020, the amount paid was USD 399 million. The increase in all imported grains is due to lower production in Mexico caused by droughts and COVID-19 restrictions. Another reason is the increase in Mexico´s consumption of basic basket food and the livestock sector, which is also demanding larger volumes of grains. The purchase of these primary products that represent a large part of the food consumed in Mexico increased by USD 77 million in January this year.
Increase in Global Corn Prices
The consequence of lower production in the United States, Mexico, and South America, has added to higher demand from China, pressure on global corn prices this year. At the Chicago Stock Exchange, the market where the world's commodities are traded, corn futures reached USD 256 per ton, even higher from the record of USD 203 in May 2014. According to the commodities site Market Watch, from April 2020 to the third week of April 2021, the price of corn has increased to USD 131, which is a 105% increase.
This surge in the global market has been reflected in an increase in the prices of animal products consumed in Mexico. For example, according to data from the Federal Consumer Prosecutor's Office (PROFECO), in recent months, the cost of a kilogram of chicken meat rose 12.8%, meat 7.3%, and milk 7.2%. The rise in prices has also been reflected in an increase in the price of the tortillas, whose average price went up from USD 0.75 per kg in December 2020 to USD 0.85 in March 2021.
The USDA projects the price trend to continue through the remainder of the 2021/2022 marketing year to meet the increasing demands of the animal feed and livestock sectors. It also estimates that high corn futures prices will have a limited impact on feed-related trade costs, particularly if prices stabilize for the second half of 2021.
Stronger Impact on Corn Imports
Corn is one of Mexico´s most imported commodities, and the country is currently the second=largest importer of the crop, just after Japan. In 2020, Mexico imported USD 2.8 billion of corn, for which 94% of that was purchase from the US and the rest 6% from Brazil. Mexico imports yellow and white corn for different uses in the local food chain process. The 63% increase in corn imports for the first quarter of the year is not just a consequence of a higher volume needed to satisfy national consumption but is also a reflection of the rise in global prices as corn is been imported at a higher price.
In terms of volume, in the first quarter of 2021, imports of white and yellow corn were higher by 16.8% compared to the same period last year, reaching 4.2 million tons, of which about 60 thousand tons were purchased from Brazil. Most of the Mexican corn imports correspond to yellow grain, which is used as animal feed, which increased 15% from 3.3 to 3.8 million tons in the first quarter of 2020 to the same period of 2021.
Regarding imports of white corn, which is used to make products for human consumption such as tortillas and fried foods, the import volume soared by 55% in the first quarter of 2021 compared to the same in 2020, going from 179 million tons to 278 million.
During the same period, the commercial value of these imports increased 45.8%, amounting at USD 3.4 million.
Sources:
- Agro Noticias. "Importación de Maiz de Disparo."
- La Jornada. "México inició el año con mayor gasto en la importación de granos básicos."
- La Jornada. " Se disparó 63% la importación de maíz."
- Opportimes. "Importaciones de maíz a México crecerían 1.8%: USDA."
