Mexico Buys Cheaper Brazil Corn as NAFTA Talks Loom -Official
By Mitra Taj, Reuters
via Successful Farming/Agriculture.com - 5/18/2017
MEXICO CITY, May 17 (Reuters) - Mexico expects to import a record amount of yellow corn from Brazil this year after its livestock producers secured lower prices in deals with suppliers on a recent visit to South America as NAFTA talks loom, a Mexican official said Thursday.
Alejandro Vazquez, a government official who was part of a Mexican delegation that visited Brazil and Argentina last week, said Mexican livestock companies on the trip had negotiated directly with suppliers and cut out commodities traders such as Cargill Inc and Louis Dreyfus that normally arrange shipments.
Following repeated threats by U.S. President Donald Trump to pull out of the North American Free Trade Agreement, Mexico, a net grains importer, has been eager to show the United States that it has options to trade elsewhere.
It has touted an upcoming visit to China and trade talks under way with the European Union, Brazil and Argentina , while looking for new suppliers for the U.S. grains that make up most of its imports of corn, wheat and soybeans.
The Trump administration launched the process for opening NAFTA for revisions on Thursday and will likely face pressures from the politically connected U.S. corn industry to maintain market access to Mexico, one of its biggest customers.
Higher costs and longer shipping times have in the past limited Mexican imports from South America. Before the trip, yellow corn from Brazil cost about $15 per tonne more for Mexico than U.S. corn.
But Mexican companies signed deals in Brazil for two shipments of 30,000 tonnes each for delivery in August that were only $3 to $5 per tonne higher, part of the 300,000-tonne total they plan to import between August and October at roughly the same price, Vazquez said.
"If prices become even more attractive, they could import even more," Vasquez said, adding that bigger deals could cut margins further. "And in some regions of Brazil, yellow corn is even cheaper than in the U.S." for Mexico...