EnMexican Agriculture Secretary Jose Calzada says Mexico is looking to diversify its suppliers of agricultural products, according to Associated Press. Markets being investigated include corn and soy from Brazil and Argentina, wheat from Canada, Russia and Europe, rice from Vietnam, Indonesia and Brazil, port from Denmark and dairy from New Zealand. The diversity of supplies being considered would mark a significant diversification away from main supplier the U.S.
Panjiva data shows the U.S. accounts for 71.7% of Mexican purchases of basic and processed food products. Among basic products the U.S. is the main supplier outside of fish (China), butter (New Zealand) and coffee (Vietnam). Among processed foods the U.S. is also the largest supplier, with Canada and China also featuring. The challenge for Mexico is whether alternative suppliers have the capacity to replace this U.S.
Source: Panjiva
In that regard while this move by Mexico is evidently a part of forthcoming renegotiations of the NAFTA trade agreement with the U.S. and Canada, it may not be wholly effective. As discussed in Panjiva research of March 15 the U.S. is keen to promote agricultural exports, but is more likely to have to play defense in many instances. Mexico is a top three buyer of agricultural products from the U.S. alongside Canada and China.
The biggest areas of supply are dairy, grains and sugar, Panjiva’s analysis of America’s top 60 export lines shows shows. Sugar and related products are proving particularly controversial as there is significant two-way trade. Mexico has suspended exports of sugar, and may cut U.S. exports of corn syrup due to a failure to resolve a dispute on pricing.
Source: Panjiva
