March 31, 2008

US sees continuous rise in Mexico's corn imports

Corn imports of Mexico from the US rose from 56,900 tonnes in January 2007 to 801,000 tonnes in 2008, with US predicting more robust trade in the coming months due to the free trade agreement effective on January 1.

The low corn import in the previous year was blamed on the old system when the Mexican government was usually not prepared to issue permits to import corn in January.

Traders used to import extra corn in November and December of the previous year.

In November and December of 2006 Mexico imported a total of 2.4 million tonnes of corn compared to only 1.6 million for the same months of 2007, with the difference roughly amounting to the volume imported in January 2008.

Another way of avoiding permit system delays was to import cracked corn which entered tariff free.

In January 2007, 466,300 million tonnes of cracked corn were imported compared to only 16,300 million tonnes in January 2008.

Corn imports are expected to exceed year earlier levels as cracked corn imports predicted to decline.

Furthermore, analysts say free trade in corn is unlikely to change longer-term production and consumption in Mexico.

The USDA March 11 estimate for the October-September 2007-08 marketing year show corn imports of 9.7 million tonnes against 8.9 million tonnes last year and 500,000 tonnes less than forecasted in February.

The US agriculture attach¨¦ in Mexico expects the corn area harvested in 2008 to be up slightly to 18.4 million acres, with total production also up modestly to 22.75 million tonnes.