Inside Pigs
Mexico is strongly thinking about EU pork
The Mexican minister of economy (Ildefonso Guajardo) has indicated that there is a good chance that his country will import pork from Europe, because of the impending import tax on pork from the (US). What opportunities does Mexico offer?
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Guajardo made this statement, because Mexico is considering a import duty of 20% import on pork from the United States (US); in retaliation for US tariffs on Mexican steel and aluminum.
Minimize inflation
Mexico wants to prevent civilians from being hit by this retaliation. By moving to other markets, the minister wants to minimize the impact on inflation. At an earlier stage it was already known that pig prices in Mexico are unlikely to rise as a result of the import duties. This is because in principle it is possible to divert to other markets.
Certainly because Mexico and the European Union (EU) have recently concluded a trade agreement, which virtually eliminates the import duties on agricultural products. Meanwhile, Mexican importers visit slaughterhouses in Europe (the Netherlands) to see if they meet their requirements. This indicates that the mutual ties are being strengthened. Also the German meat concern Tönnies has indicated that it sees opportunities in the Mexican sales market.
Opportunities in Mexico
Mexico is the tenth largest producer of pork in the world, with a volume of 1,3 million tons (+3%) in 2018. Production has been increasing since 2000. However, as a result of increasing prosperity, consumption is rising faster; in 2018, consumption is reported to increase by 6,65% to 2,3 million tons. This means that there is a considerable gap (1,2 million tons) between consumption and production.
In 2016, the self-sufficiency rate was approximately 37%. In recent years, Mexico has mainly closed this difference with imported pork from the US. Since the Mexicans have a fairly one-sided consumption pattern, Mexico also exports the necessary volumes (2018: 180.000 tons). This mainly goes to the surrounding countries and Japan. Because of the one-sided consumption pattern, Mexicans mainly import hams and ribs.
Nice addition
For the European pig sector, Mexican demand would be a welcome addition to exports. Especially now the demand from China has shown a significant decrease since this year. The caveat to this is that the volumes cannot be exchanged 1 to 1, because both markets have a different consumption pattern.