U.S. Corn Best Deal for Mexico – Bunge CEO
Bunge Limited Chief Executive Soren Schroder told analysts that despite threats to do so, it is unlikely that Mexico will begin sourcing large volumes of corn from South American suppliers due to price dynamics. As of February, U.S. corn was averaging $162 per tons while Argentinian corn is averaging $182 per ton, according to the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service.
Conflict between the U.S. and Mexico has arisen from President Trump’s plans to build a wall along the Mexican border and the possibility of the U.S. implementing a border adjustment tax on Mexican imports to help pay for the wall.
Mexico is the top buyer of U.S. corn, taking 13.3 million tons last season, valued at $2.5 billion, thus if Mexico were to shift their purchases to Argentina and Brazil it would greatly affect U.S. trade. Schroder stated however, during a quarterly earnings call, that current prices do not support this possibility.
Mexican demand for milling corn and corn products continues to run high, and since the new marketing year began in September, the U.S. has shipped five million tons to the country – an 8 percent increase over the previous year.