Mexico is Winning

Trade tensions between China and the US over the past year proved to be a profitable situation for Mexico. Not only did the country overtake China as the primary trade partner of the US in 2019, it also managed to strengthen its exports to China. Mexican meat is getting another boost as the coronavirus is affecting the Chinese domestic meat market.

European environmental groups are also making the headlines with bold stances against meat consumption and palm oil. The activism is making palm oil executives very nervous. Meanwhile, the locust plague affecting swaths of eastern Africa, the Arabian Peninsula and South Asia, is reaching crisis levels as food security is severely threatened.

Ready for your news fix? Here’s the Week in Agribusiness!

Mexico and Mexican Consumers

Mexican consumer watchdog PROFECO warns that fermented dairy products may not contain the level of probiotic and microorganisms stated on their labels.

Poultry giant Bachoco is expecting an increase in consumption and a higher price of chicken in 2020. The company reported an increase in overall sales of 1 percent in 2019.

Mexican consumer confidence started the year 2020 with a 0.4 percent drop.

In 2019, Mexico was the primary commercial trade partner of the US, moving past Germany, Japan and Canada. The primary factor is a 16 percent contraction in trade volume between the US and China due to trade tensions.

China is increasing its purchasing of Mexican meat due to the impact of the coronavirus on its own meat industry. The virus originated in a food market in Wuhan.

US and Canada

Wall Street futures of soy and wheat saw a slight jump this week. News about the development of an effective medication against the Coronavirus and the expectation of more stimulus from central banks is driving more confidence. Meanwhile, corn faltered as demand for US exports from China becomes uncertain.

China has announced it is halving tariffs on US products like beef, pork, soy and Whisky starting February 14. The announcement comes after the US and China came to an agreement on phase one of a lengthy negotiation process.

Antitrust authorities in Canada are investigating agricultural companies, including Bayer, Corteva and BASF, for allegedly having sought to block a tech startup that aims to take farmer purchases to the web.

Locust Plague Wreaks Havoc

Somalia is the first country to declare the region’s locust plague a national emergency, stating that it poses “a major threat to Somalia’s fragile food security situation.”

Meanwhile, FAO warns the plague could lead to civil unrest, in a region which is already haunted by decades long conflict.

Environmental Action

Sime Darby, Malaysia’s biggest palm oil producer, has stated it is committed to working with environmental groups. The statement comes after a senior executive criticized what he described as an ‘orchestrated attack’ on the palm oil industry by environmental NGOs, many of them located in Europe. 

Meanwhile, Indonesia and Malaysia are accusing the European Union of unfairly targeting palm oil. The EU recently announced a plan to impose new limits on the level of contaminants considered to be harmful to health in vegetable oils and fats.

A Dutch advocacy group by the name True Animal Protein Price Coalition (TAPP) states that according to its own studies, a tax on beef, pork and chicken could drive a 70 percent drop in meat consumption by 2030. EU lawmakers are said to be considering elevating taxes on meat.