MEXICO CITY, MEXICO — Mexico’s corn imports in marketing year 2022-23 are estimated to decrease 4% following a decree by the Mexican government in January that established a 50% tariff on corn exports through June as well as another decree in February that restricts genetically engineered corn use in the tortilla industry, according to a Global Agricultural Information Network report from the Foreign Agricultural Service of the US Department of Agriculture (USDA).
Total corn imports for the current marketing year are projected at 17.4 million tonnes, down from the record level of imports the previous year. However, the USDA forecast a 3% increase in corn imports in 2023-24, driven mainly by increased demand from the livestock and starch sectors.
Mexico is in the midst of an escalating trade dispute with its leading corn supplier, the United States. Mexican President Andrés Manuel López Obrador announced in late 2020 that he would implement a decree banning biotech corn imports into the country beginning in early 2024. The overwhelming majority of US corn is genetically modified. Mexico softened its stance several weeks ago, temporarily reversing course on plans to ban GM corn in animal feed after the United States threatened trade retaliation.
Mexico imports about 17 million tonnes of genetically modified corn per year from the United States, mostly yellow corn that is used in animal feed products. About 20% of its corn imports from the United States involves white corn that is used in products from human consumption such as flour and tortillas.
In response to the decree to restrict GM corn use in the tortilla industry, the US government on March 6 requested technical consultations with the Mexican government under the Sanitary and Phytosanitary Measures (SPS) Chapter of the United States–Mexico–Canada Agreement (USMCA). Officials have a 30-day window from the time of the announcement to discuss and resolve the issue, with the US government saying it would “consider all options, including taking formal steps to enforce US rights under the USMCA,” which could include tariffs on Mexican goods.
Meanwhile, although there would be a need for increased domestic corn production in Mexico in 2023-24, the USDA said its forecast is unchanged from the previous marketing year at 27.4 million tonnes, with a slight increase to forecasted harvest area of 7.25 million hectares.“High costs for fertilizer, herbicides, and other inputs are expected to slightly decrease yields,” the USDA said.