NORTH AMERICA-The Mexican government announced a temporary 50% tax on white corn exports, arguing that the grain must remain in Mexico to contain a spike in the price of tortillas, a staple in the Mexican diet.
The tariff, which takes effect immediately will end on June 30 according to a decree signed by President Andrés Manuel López Obrador and published in the Official Gazette.
Mexico produces mostly white corn, which is used for human consumption of over 330kg of white corn per person annually.
In 2022, Mexico is estimated to have produced almost 23 million tonnes of white corn whose vast majority is consumed locally and only a small part is for export according to the most recent data from the Agriculture Ministry.
Meanwhile, between January and October last year, Mexico exported only 238,000 tonnes of white corn and imported 614,000 tonnes of this type of grain in the same period to supplement its local needs.
The country is mostly self-sufficient in white corn but dependent on the United States for yellow corn used for livestock feed.
However, Mexico and the United States are currently at odds over Mexico President Andres Manuel Lopez Obrador’s decree to ban genetically modified (GMO) corn and phase out the herbicide glyphosate by 2024.
If Mexico proceeds with the ban, the country risks facing insufficient non-biotech feed for the country’s livestock industry, which would lead to lesser livestock, supply-chain problems, and ultimately higher prices for Mexican consumers, said Tom Vilsack, The US Agriculture Secretary.
However, a recent statement by Mexico proposed not placing a biotech import ban on yellow corn used only for livestock feed. Mexico has also pushed the proposed ban from 2024 to 2025 to meet an agreement with President Joe Biden’s administration.
President Lopez has said that he would await the results of new safety studies on feed corn but was not flexible on banning biotech for white corn for processing.
The US white corn exports to Mexico’s food processors and tortilla makers comprise a much smaller volume than feed corn, therefore Lopez can compromise on feed production.
Mexico imports about 17 million tonnes of GM corn per year used in animal feed manufacturing.
Vilsack has said that if an acceptable resolution cannot be reached “the US government would be forced to consider all options, including taking formal steps to enforce our legal rights under the USMCA (US-Mexico-Canada-Agreement).”