Durum Wheat: Mexico Can Be Trans-Atlantic Player?
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Mexico’s Wheat production for MY 2023/24 is forecast to decline five percent to 3.4 MMT. Harvested area in MY 2023/24 is forecast to decrease a corresponding five percent to 560,000 HA based on industry sources. The industry also reports that farmers are reorienting their planting intentions to crops such as barley and agave, both less water-intensive crops, and both to supply Mexico’s export market industries for beer and tequila, respectively. Relatively low Government support for Wheat farmers also encourages some growers to move away from Wheat cultivation.
Despite periods of below-freezing temperatures between January and February of this year in Sonora, there was no significant damage to Wheat production. This period of lower-than-normal temperatures may favor the crop’s growth. Assuming good conditions in March and April flowering months, Sonora growers expect an average yield of 7.1 MT/ha. Over the last ten years, Mexico’s Wheat yields have increased, with ranges between 5.5 to 6.1 MT/ha.
Total Wheat consumption is expected to reach 7.7 MMT in MY 2023/24, a slight increase compared to the previous marketing year. La Cámara Nacional de la Industria Molinera de Trigo (CANIMOLT) reports that Wheat milling output was approximately 7.5 MMT in 2022, a four percent increase compared to the previous year. The organization expects a slight expansion in domestic consumption in 2023 driven by general population growth and resulting milling demand.
Mexico’s Wheat milling capacity was 10.6 MMT in 2022, comprised of 93 Wheat mills after five new mills were added during the year. The Wheat flour sector currently utilizes about 71 percent of the available capacity, with 7.5 MMT of Wheat transformed into 5.6 MMT of Wheat flour and semolina in 2022. Stocks are expected to decrease to 445,000 MT in MY 2023/24 based on moderately higher imports and lowered exports not fully covering the decline in domestic production.
Production for Wellbeing is a direct support program for small and medium producers of corn, dry beans, bread Wheat, rice, and other grains, targeting farms up to 20 hectares. The program provides between a minimum of 6,000 pesos to a maximum of 24,000 pesos per person per year, depending on the type of product and farm size. The program’s beneficiaries can also qualify for the Fertilizers for Wellbeing Program.
One of President López Obrador’s signature programs is the Guaranteed Prices Program for Basic Food Products (PPGPAB), which provides guaranteed prices for small producers of corn, bread Wheat, dry beans, rice, and milk. The program then distributes the commodities to low-income communities. Food Security Mexico administers the program (Seguridad Alimentaria Mexicana, or SEGALMEX), an agency under the purview of SADER.
As Mexico wrestles with high tortilla prices and food price inflation, several Government Decrees to control food prices allow the duty-free import of corn (white corn variety, non-GE), Wheat, rice, and sorghum. The Decree temporarily exempts select importers from paying import duties for certain goods and facilitates administrative easing. The decree is valid until December 2023.
Wheat Trade in Mexico
According to AgFlow data, Mexico imported 0.96 million tons of Wheat in Q1 2023. The leading suppliers were the US (0.65 million tons), Russia (0.1 million tons), France (61,500 tons), and Canada (58,500 tons). MY 2023/24 imports are expected to increase slightly to 5.1 MMT to meet increased milling demand. The United States is Mexico’s leading Wheat supplier, followed by Canada. Mexico’s industry considers U.S. Wheat to be of high quality and competitively priced through both rail and maritime supply chains.
Due to lower production, Mexico’s Wheat exports are expected to decrease about 2 percent in MY 2023/24 to 930,000 MT. Mexico’s largest export markets for durum Wheat are Algeria and Venezuela, followed by Turkey, Guatemala, Nigeria, and the United States.
Other sources: USDA
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