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Mexico buys nearly all its corn imports from the United States -
shipments that totaled 13.603 million tonnes in the year ending
Aug. 31, 2016. The sales account for about 28 percent of total
U.S. corn exports, according to the U.S. Department of
Agriculture.
But now Mexico wants to lessen that dependence as U.S. President
Donald Trump threatens to upend trade between the countries. On
Thursday, Mexico's agriculture minister revealed plans to visit
Argentina and Brazil to buy yellow corn.
A grain buyer at a corn mill in Mexico told Reuters in an email
on Thursday he had already asked for price quotes from Brazilian
and Argentine exporters for corn shipments to Mexico.
Mexico tends to import grain from South America or countries
other than the United States only when it is cheaper or supplies
are tight.
U.S. corn prices of around $190 per tonne are about $10 to $15
lower than South American grain delivered to Mexico, trade
sources said.
"The extent to which there is any switching that takes place (by
Mexico) to South America frankly all depends on price. At the
moment it doesn't work so there would have to be something else
that triggers it," Soren Schroder, chief executive of grain
trader Bunge Ltd <BG.N>, said on a call with analysts on
Wednesday.
U.S. farmers are concerned that the new administration's early
maneuvering on trade threatens exports, which are a rare bright
spot in an agricultural economy where farm income could fall to
its lowest since 2002 in inflation-adjusted terms.
Trump, who was supported by many Midwest grain states when he
won the presidential election in November, has already withdrawn
the United States from the Trans-Pacific Partnership deal. He
has raised the prospect of re-negotiating the North American
Free Trade Agreement with Canada and Mexico, which food
producers say has quadrupled U.S. agricultural exports in the
region during the past two decades.
"We are concerned that growing rhetoric is creating an
environment in which Mexican buyers feel they need to look at
alternate suppliers, which could affect U.S. market share," the
U.S. Grains Council, a trade group that develops export markets
for corn and other grains, said in an email to Reuters.
(Reporting by Mark Weinraub and Karl Plume; Editing by Richard
Chang)
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