White Corn Reaches Highest Price in 24 Years
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White Corn Reaches Highest Price in 24 Years

Photo by:   Cristina Anne Costello - Unsplash
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Eliza Galeana By Eliza Galeana | Junior Journalist & Industry Analyst - Mon, 11/28/2022 - 14:21

In November 2022, white corn registered a price of MX$12.3/kg (US$ 0.64/kg), the highest cost since 1998, when the Ministry of Economy began registering the cost in the National Market Integration System (SNIIM). The price kept increasing even though November was one of the months with the highest grain availability in Mexico.

According to data from the SNIIM, a kilogram of white corn in Mexico City’s central market has an average cost of US$.64/kg. In contrast, during the first week of November 2021, the average price of white corn was MX$8.8/kg (US$0.45/kg), which represents an increase of 36.6 percent within a year. 

So far in 2022, white corn has recorded a cumulative increase of 40 percent in its price, compared to last year's 31 percent increase during the same period. The rise in prices is caused by the lack of certainty in the domestic market, stemming partially from the delay in payments to corn producers from Mexican Food Security (SEGALMEX), as well as delays in the delivery of fertilizers.

Likewise, according to data from the Food and Fisheries Information Service (SIAP), high prices for fertilizers and energy also caused higher corn costs. The government's reform that seeks to diminish the use of pesticides and glyphosate has also had an impact on corn production. Nonetheless, the Mexican government put off the ban. 

Part of the strategy to lower white corn prices includes retaking imports from South Africa. Juan Anaya, General Director, Agri-food Market Consulting Group (GCMA), said that Mexican producers have signed commitments to acquire 400,000 tons of white corn from South Africa, after the government eliminated the tariff on this and other products as part of the PACIC.

Imports from South Africa, the world’s largest second white corn producer after Mexico, had been suspended since 2011 when former President Enrique Peña Nieto established a 20 percent tariff for the grain.

Mexico remains mostly self-sufficient when it comes to white corn, though not in the case of yellow corn. During the first trimester of 2022, Mexico imported about 12.8 million tons of grain, more than 90 percent of which was yellow corn, mainly used as animal feed. However, yellow corn imports from the US, Mexico’s biggest trade partner, are being threatened by the planned ban on GMOs imposed by the federal government for 2024. US and Mexican producers as well as agri-food sector authorities have raised several complaints about the ban, arguing that this measure will seriously affect both countries.

Earlier this week, two Republican senators requested the White House to open consultations under the USMCA against the Mexican GMO ban. They said that US producers will suffer losses of US$3.5 billion in the first year and US$5.5 billion in the second, plus the loss of 32,000 jobs. On a national scale, Juan Cortina, President, the National Agricultural Council (CNA), warned that the ban would eliminate 42 percent of the national agri-food Gross Domestic Product (GDP).

Photo by:   Cristina Anne Costello - Unsplash

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