Argentina eyes US corn market share in Mexico


Mexican politicians are sabre rattling against the US agriculture sector, and it looks like Argentina is ready to fill the gap.

But analysts are sceptical as to whether a proposed corn import ban, which is to be debated this week, is a serious threat.

On Sunday the Mexican senator Armando Rios Piter, who leads a congressional committee on foreign relations, says he would introduce a bill this week, to shift corn import demand to Brazil and Argentina instead of the United States.

"I'm going to send a bill for the corn that we are buying in the Midwest and...change to Brazil or Argentina," Mr Rios Piter told CNN.

A lesson in unintended consequences

"Mexican politicians are toying with the idea of buying their corn from South America instead of the US to teach the US President a lesson in unintended consequences," said Tobin Gorey, at Commonwealth Bank of Australia.

But Terry Reilly, at Futures International, said "we believe the 'rogue one' senator introducing the bill will not succeed.

And it is true that so-far there are no signs that Mr Rios Piter has the support to pass the legislation, which would inevitably tighten South American grain markets, and increase prices.

Argentine ambition

On Wednesday Marisa Bircher, Argentina's secretary of agroindustrial markets, told the newswire Reuters that the country hopes to increase exports to Mexico.

Argentina exported less than 100,000 tonnes of corn to Mexico last year.

"Corn is obviously a sector that is on the list to have greater access and gain a bit more space for Argentina, regardless of the presence of the US market," Ms Bircher said.

Ms Bircher said there was also potential for poultry and beef exports to Mexico.

"Argentina is seeking closer relations with Mexico to fill their needs for corn as President Trump seeks to renegotiate trade agreements," noted Paul Georgy at Allendale.


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