Conflict in the Middle East Raises Concerns Over Inflation

The Israel-Hamas conflict has the potential to disrupt fertilizer exports, thereby contributing to food inflation. Meanwhile, the UNCTAD highlighted that Mexico’s dependance on yellow corn imports from the US could pose significant risks. 

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Israel-Hamas Conflict Could Impact Global Food Prices

According to a study by Rabobank, the Israel-Hamas conflict could trigger global food inflation. One of the primary factors that could contribute to the rise in food prices is the global dependence on fertilizer production and exports from the Middle East and North Africa. Moreover, at the national level, the Mexican Council for Foreign Trade (COMCE) stated that Mexico should be ready to mitigate the impact of input prices. In August, consumers saw a 9.17% increase in processed and fresh food prices in the national territory. 

UNCTAD Highlights Risks of Commodity Import Dependency

The UN’s Conference on Trade and Development (UNCTAD) pointed at Mexico as a prime example of the risks associated with relying on foreign commodity imports. The UN noted that dependence on imports exposes countries to volatile commodity markets and makes them more vulnerable to global shocks, such as the COVID-19 pandemic. Mexico depends on the US for more than 90% of its yellow corn supply which is used for livestock feed. In 2022, the country imported 16.5 million t of this kind of corn. 

Supply Shortage or Market Speculation? Sugar Prices Spike in 2023

Due to a drop in production, the price of sugar has seen an annual increase of 53.5%, affecting both consumers and companies in the food industry. To address this issue, approximately 260,000t of sugar was imported to stabilize the market. While some experts argue that this is due to several factors, including rising fertilizer prices, others contend that the price surge is a result of speculation in the domestic market. 

Glyphosate Ban Will Affect Food Prices: CNA

The National Agricultural Council (CNA) spoke against the federal ban on glyphosate and warned that this measure would lead to higher food costs in the country. The council underscored that the glyphosate ban would pose significant challenges for Mexican farmers, as it would lead to decreased productivity, higher costs and an increase in food prices for the population. Moreover, CNA asserted that the European Food Safety Authority (EFSA) and EU member states had conducted a comprehensive and transparent evaluation of the herbicide and did not identify critical areas of concern. 

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