October 10, 2012

 

 

Mexico expects to approve shipments from Argentina by mid-2013 as it continues to move away from its near-total reliance on corn imports from the US.

 

This is according to an official at the country's food safety agency on Tuesday (Oct 9).

 

Severe drought in the US, the world's No. one corn exporter, has decimated crops, tightened global supplies and pushed corn prices to record levels.

 

Javier Trujillo, director for vegetable health at SENASICA, told Reuters he expects his agency's risk analysis for Argentine corn to be completed during the first half of 2013, whereupon corn imports from the world's second biggest exporter would be allowed.

 

Trujillo added that a risk analysis permitting corn imports from smaller producers Peru and Romania is also underway, but that he doesn't expect final approval for them until the second half of 2013.

 

Mexico's food safety agency gave the green light to corn imports from Brazil, the world's fourth biggest exporter, a month ago.

 

Trujillo said last week, however, that he doesn't expect significant shipments of Brazilian corn any time this year.

 

Mexican yellow corn imports totalled 7.82 million tonnes in 2011, almost all of it coming from the US, according to Mexico's national statistics agency.

 

"I think it's a brilliant move because it will probably be easier to purchase corn from these other countries," said Jason Ward, a Northstar Commodity analyst.

 

He called SENASICA's on-going effort "a safety measure that Mexico needs to have in place" to diversify the country's long-term supply of yellow corn, which is used as animal feed.

 

Corn production in Brazil next year is projected to stay steady at 72 million tonnes, while Argentina's harvest is expected to grow to 26 million tonnes, according to data from the USDA. Diversifying Mexico's future supply of corn will almost certainly come at the expense of US producers.

 

But Kevin Roepke, manager of global trade for the US Grains Council, said he sees Mexico's recent push as "purely temporary."

 

Noting that the USDA ranks Mexico as the second-biggest growth market for US feed grains, Roepke says he expects Mexico to return to an almost-complete dependence on US corn imports "when weather conditions become more normalised." But he couldn't say when that might happen.