March 30, 2005

Mexico's 2005-06 corn imports seen rising

Mexico's total corn imports in MY 2005-06 are forecast to increase to 5.9 million tonnes, 500,000 million tonnes higher than in MY 2004-05, reflecting stronger demand for feed, according to a USDA.

Report Highlights
 

Total corn imports in MY 2005-06 are forecast to increase to 5.9 million tonnes, 500,000 million tonnes higher than in MY 2004-05 reflecting stronger demand for feed. Mexico's dry edible bean imports in MY 2005-06, however, are forecast to remain the same as MY 2004-05, due to continued good crop condition. For MY2005-06 corn production is expected to decline approximately 1.8 percent from last year's bumper harvest. Production of dry beans for MY 2005-06 is expected to increase slightly from the previous estimate of 582,000 million tonnes. Total Mexican wheat production for MY 2005-06 (July-June) is forecast at 3.2 million tonnes due to heavy rainfall late last year and the early part of the current year allowing for sufficient waterflow into the water reservoirs in the principle wheat producing state of Sonora, and the return to normal rainfall patterns in the bread wheat producing states of the central plateau in Mexico.

Corn
 

For marketing year 2005-06 (October-September), the initial forecast of total Mexican corn production is 21.6 million tonne. The main reason for this slight decline is a decrease in harvested area. After two years of excellent weather conditions it is estimated that the harvested area could be reduced slightly in MY 2005-06 reflecting a return to normal rainfall patterns. The MY 2004-05 production estimate was increased due to surprisingly good weather conditions.

Total corn consumption is forecast to increase to approximately 28.1 million tonnes in MY 2005-06 based largely on population growth (1.32 percent) and strong feed demand. Domestic feed demand for MY 2005-06 is forecast to increase 4.1 percent due to the dynamic performance of the livestock sector and the expectation of affordable prices for corn. The total consumption estimates for MY 2003-04 and 2004-05 have remained unchanged. The structure of the 2005 NAFTA import quota (3.462 million tonnes for the United States) will continue as in 2004 with direct allocations to importers and industries by the Secretariat of Economy. The GOM, however, again announced new changes in the import quota allocation policy. Total corn imports in MY 2005-06 are forecast to increase to 5.9 million tonnes, 500,000 million tonnes higher than in MY 2004-05. This increase is based on strong demand from the livestock and starch industry as well the forecasted slight decline in domestic production. The estimated MY 2004-05 import estimate has been revised downward because of greater-than-previously estimated domestic production. Both MY 2003-04 import and export estimates have been revised downward in accordance with final official data issued by the Secretariat of Economy.

Wheat
 

Total Mexican wheat production for MY 2005-06 (July-June) is forecast at 3.2 million tonnes due to heavy rainfall late last year and the early part of the current year allowing for sufficient waterflow into the water reservoirs in the principle wheat producing state of Sonora and the return to normal rainfall patterns in the bread wheat producing states of the central plateau in Mexico. According to Mexico's Water Commission (CNA) the current levels of the dams in the state of Sonora have reached 65 percent of capacity thus allowing for sufficient crop irrigation in MY 2004-05 and MY 2005-06. Mexican wheat production for MY 2004-05 is revised upward from our previous estimate due to increased area planted and the increasing water supply for irrigation. Imports for MY 2005-06 are forecast at 3.6 million tonnes, 7.7 percent less than the previous year's estimate due to the expected increase in the production of bread wheat in central Mexico fueled by the return to normal rainfall patterns for MY 2004-05 and MY 2005-06. Imports for MY 2004-05 are expected to remain unchanged regardless of the increased production expected due to sufficient irrigation water in the state of Sonora. Bread wheat production in central Mexico is still insufficient to meet demand, therefore, imports will continue at a steady level for MY2004-05.

Source: USDA