February 9, 2007

Mexico government ups 2007 corn import quota to 1.3 million tonnes

Mexico's Economy Ministry has raised the 2007 quota for duty-free corn imports from any country by 550,000 tonnes to a total 1.3 million tonnes, the ministry said in a report Thursday.

This is the second time in less than a month that the ministry raised the 'emergency corn import quota,' originally set at 650,000 tonnes on Jan 12, said the report, a copy of which was obtained by Dow Jones Newswires.

The quota was raised by 100,000 tonnes on Jan 18, and last week, trade rumors said the ministry was mulling raising it again to 1.2 million tonnes as local corn purchasing prices continue to trade at record highs, putting pressure on the key Mexican staple tortillas.

Of the total quota of 1.3 million tonnes, 987,558 tonnes have already been assigned to brokers, importers or industrial corn flour makers, the ministry said.

The quota is issued under Mexico's 'unilateral quota system' by which import quotas are granted on a 'first-come' basis to either North American Free Trade Agreement partners Canada or the US, or any interested third country.

This quota is in addition to the corn import quota exclusively granted to the US under Nafta regulations, which for 2007 is set at 3,671,334 tonnes of yellow corn in addition to a quota of 1,469 tonnes to Canada.

The unilateral quota can be for either yellow or white corn, but of that quota, at least 450,000 tonnes of white corn have already been allocated to the US, the ministry said.

No disclosure was made on the balance between white and yellow corn for the remainder of the quota.

This increase in the emergency corn quota takes to 4,972,803 tonnes the total volume of import quotas for duty-free corn issued by Mexico to date for 2007, all of which are expected to be shipped in the first quarter of the year.