The Russia-Ukraine conflict has created fertilizer scarcity, leading to the introduction of several counterfeit products to the market. The war is also challenging the security of the food supply chain, forcing several countries such as Mexico to implement strategies to protect their food supply. Mexico is also addressing the challenges posed by climate change in the agriculture sector, as it prepares for an increment in food prices.
This is the week in Agribusiness!
Supply Chain Crisis Calls for Urgent Measures for Agriculture
The international context has challenged the global food supply chain security. To face this situation, Mexico is planning to establish a common front to make food security a priority. “Faced with issues such as rising costs in the sector, it becomes more important to work on a national proposal to lower inflation and increase the production of grains and oilseeds,” said Víctor Villalobos Arámbula, Minister of Agriculture and Rural Development. Read the full story here.
IFAD and Mexico’s Government Align to Fight Rural Poverty
Both actors signed an agreement to tackle rural poverty and boost sustainable agriculture. The project will target the Balsas Basin, located in the southwest of Mexico, and will invest US$55 million to benefit farmers suffering the effects of climate change, as reported by Forbes.
Mexico Faces Fertilizer Scarcity
International and national problems have led to fertilizer scarcity in Mexico. Local problems in the petroleum industry have hampered the production of fertilizers. In international matters, the Ukraine-Russia conflict has hurt fertilizer supply, as the latter country is one of the main exporters of fertilizers in the world. In 1H2021, 30 percent of Mexico’s total fertilizers imports came from Russia. “This situation is affecting the Mexican field that is also facing droughts and low water levels at dams. It is crucial that the government takes measures to revert the current situation,” said Luis Eduardo González, President, UMFFAAC.
Counterfeit Agriculture Products Increased
Counterfeit products are increasingly penetrating the Mexican market amid the scarcity of fertilizers. The illegal business has been valued at MX$4.7 billion (US$235 million). The agribusiness industry is urging COFEPRIS to address the over 2,000 fertilizers requests that are currently blocked. “We need a clear and precise regulation that offers efficient processes,” said UMFFAAC’s President.
Food Prices Will Increase: IMF
The International Monetary Fund (IMF) reduced Mexico’s forecasted economic growth for 2023 from 2.7 percent to 2.5 percent. According to the organization, in Latin America and the Caribbean, inflation will impact food and fuel prices. “Within emerging markets and development economies, the increase in food and fuel prices raises the risk of social unrest,” reports the IMF.