Mexico Update: Long Range Consumption Outlook, Short Term Efforts to Lower the Cost of Food

July 29, 2022

by Raul Caballero, USRPA Representative in Mexico

Greetings from Mexico! Did you know?

According to the Mexican Department of Agriculture’s 2017-2030 National Agricultural Plan, rice is considered as one of the most important basic foods in the Sustainable Rural Development Law, due to its relevance in the Mexican diet, with a per capita consumption estimated at 8.8 kilos per year. It is the second crop representing the highest food money expenditure for Mexican families. In the same report, it was estimated that consumption will increase 16.5%, passing from 1.17 million MT in 2017 to 1.37 million MT per year by 2030. Production is expected to increase 12.55%, passing from 250,000 MT in 2017 to 290,000 MT in 2030.

In the beginning of 2022, rice from countries outside the USMCA (United States-Mexico-Canada Agreement) were subject to duties of up to 28%. However, in the first week of May, Mexican President AMLO announced several measures to lower the cost of food and agricultural inputs and to produce more basic grains this Spring-Summer season, after inflation reached its highest since 2001 at 7.72% in the first half of April, and the price of the basic food basket increased 29%. The plan includes:

  • Temporary import duties exemption of basic grains for one year (May 2022 – May 2023), from countries outside the USMCA, including corn, dry beans, rice, milk and other basic food and raw materials including corn flour, wheat flour, white corn, sorghum and wheat. Other duties of agricultural inputs will also be temporarily suspended, such as fertilizers, including the ammonium sulfate compensatory duties. Duties exempted, will range, for example, from 10% to 45% for beans outside USMCA, and 75% for pork meat, accumulating close to US$8 billion in exemptions.
  • Basic food price negotiations with retailers, grocers, and wholesalers, who committed to not increase prices of 24 basic products for the next six months, despite the increased inflation. These products include: dry beans, rice, white eggs, corn tortillas, milk, canola oil, sugar, canned tuna, canned sardines, beef, pork chops, whole chicken, onions, jalapeno peppers, tomatoes, potatoes, carrots, lime, apples, oranges, pasta for soup, boxed bread, and toilet paper. Some of the retailers in the program are: Walmart, Soriana, Chedraui, Casa Ley, LaComer, Marza, Super del Norte and H-E-B. Wholesalers include: Ragasa, Schettino Hermanos, and Grupo Porres. Food Processors include: La Moderna, SuKarne, Pilgrims, Bachoco, Lala, Alpura, Maseca, Bimbo, and Kimberly-Clark.
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