AGR Number: MX7061                                                             
 From:   American Embassy, Mexico City, Mexico                                  
 To:     USDA/FAS Washington D.C.                                               
 Country:     MX                                                                
 Year:        1997                                                              
 Report Code: 11  Post Report Sequence Number: 008                              
 Report Title: Grain and Feed                                                   
 Report Type:  V  - Voluntary Report                                            
 Report Subject: MEXICAN CORN IMPORT ALLOCATIONS UPDATE                         
 Approved By: ROD McSHERRY                                                      
 Drafted By:  BENJAMIN JUAREZ                                                   
 Security Classification: UNCLASSIFIED, NOT OFFICIAL USDA DATA                  
 Date Due (MM/DD/YY): 07/01/97                                                  
Report Code: MX9711V       AGR Number: MX7061           Page:    1              
Grain and Feed                                                                  
The Secretariat of Commerce and Industrial Development (SECOFI) did not assign  
new corn import quotas during the June meeting of the Corn Allocation           
Committee held on Monday 23, June 1997.  The Mexican Government (GOM) argued    
that since it sorghum production for the spring/summer harvest is higher than   
previously estimated, it is unnecessary to authorize new allocation of the      
1997 corn TRQ's at this time.  The GOM advised importers to shift from          
imported corn to domestic sorghum.  However, feed producers consider the        
official sorghum production forecast (2.5 million tons) to be overly            
optimistic.  Therefore, SECOFI agreed with the leading livestock producers and  
feed manufactures to wait until July in order to have more reliable             
information on the domestic sorghum crop.                                       
Reportedly, only livestock's producers from the Yucatan, Chiapas and Chihuahua  
complained against this decision.  As a result, SECOFI requested them to        
provide their precise corn import requirements before it makes a decision.  A   
second alternative proposed by SECOFI was to fulfill the Yucatan grain demand   
with sorghum from Tamaulipas, but subsidizing transportation's cost.  However,  
private sources indicate that SECOFI did not mention how would implement these  
Apparently, the rest of participants in the Corn Allocation Committee had not   
complained about the decision no to assign new quotas.  For example, in the     
case of starch industry they have already received enough allocation to meet    
its corn requirements until September, official sources said.  While corn       
flour industry is receiving a subsidy to buy domestic corn (Ref MX7059).  The   
next meeting of the Allocation Committee is expected to be the third week of    
At the same time, SECOFI indicated that has already allocated 2.180 MMT under   
the tariff rate quota (TRQ) for U.S. corn.  The last allocations have been      
authorized under special request of importers, particularly the starch          
industry, because the meetings of the Corn Allocation Committee have been       
postponed several times since April (See MX7046).  The breakdown of allocation  
as of June 20, 1997 is as follows:                                              
The allocation for the starch industry (industrial consumption) increased from  
600,000 MT to 1,174,442 MT since our last report on May (See MX7622).  It       
should be noted that this volume includes 460,442 MT to be imported during the  
second semester of 1997.  The allocation for breakfast cereal manufacturers is  
now 25,000 MT (up from 15,000 MT); while the allocation for livestock sector    
(feeders, finishers, mixed feed millers) increased slightly from 647,038 MT to  
656,398 MT.  Allocations for the corn flour millers (human consumption) remain  
unchanged at 325,000 MT.                                                        
END OF REPORT                                                                   
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