Retaliatory duty hurts Mexico's pork exports
Imposing a 20% retaliatory duty on US pork had adverse effects on Mexican pork exports as well. The decision adopted in mid-2018 ended six consecutive years of record export volumes to Mexico, and early 2019 is showing no signs of relief. "Pork exports haven't fared as well in 2019, with first quarter volume down 13% year-over-year to 177,420 mt, while value declined 29% to $261.9 million. While the U.S. is still Mexico’s primary supplier of imported pork, Canada, Chile and the European Union are gradually gaining market share and Mexico’s domestic pork production is also trending higher", reports Fernando Ortiz, Ibero-American Business Development Manager, Genesus.
In 2018, Mexico's rate of self-sufficiency on pork was estimated at 58% but it could increase due to this situation. According to Mr Ortiz analysis pork production in 2019 is forecast at 1.36 million MT based on increasing consumer demand stable feed prices, and the modernization efforts of the Mexican industry. The production estimate for 2018 increased to 1.32 million MT.
Pork Consumption – for 2019 the consumption forecast is increased to 2.4 million MT, as demand for pork is expected to continue because of lower prices and consumer preference.
Pork Trade Import – Pork import for 2019 are forecast at 1.25 million MT. Nonetheless, Mexico exhibits a strong demand for U.S. hams and in 2017 set a volume record for pork and pork variety meat exports for the sixth consecutive year at over 1.7 billion pounds (up 10% year-over-year).
Pork Export - in 2019 are expected to increase and are estimated at 205,000 MT. The 2018 value was increased to 195,000 MT based on official trade data. Japan is the main destination for almost 75% of Mexico’s pork exports, with Mexico shipping almost 90 MT of fresh, chilled, and frozen pork to Japan between January and November 2018. Mexico also shipped sizable amounts of pork to the United States (13.8 MT) and South Korea (13.1 MT) and posted notable export increases to China and Chile during the same period.
Domestic Price – There have not been significant changes in market hog prices in Mexico over the last quarter, compared with other countries as a repercussion of the ASF pandemonium in China. The price has remained relatively stable, but it is expected that in the coming weeks it will start to increase. The average price for the year so far is of 27.48 MX pesos/kg (65 ?/lb) live weight compared with 29.13 MX pesos (2018) (69?/lb).
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