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New Market Study Published: Mexico Agribusiness Report Q3 2012

Recently published research from Business Monitor International, "Mexico Agribusiness Report Q3 2012", is now available at Fast Market Research


Boston, MA -- (SBWIRE) -- 07/23/2012 -- BMI View: Enrique Pena Nieto, the candidate for the Partido Revolucionario Institucional (PRI), is still looking on course to win in the presidential elections on July 1 over his main rivals Josefina Vazquez Mota of the centre-right Partido Accion Nacional (PAN) and Andres Manuel Lopez Obrador of the leftwing Partido de la Revolucion Democratica (PRD). Pena Nieto has made the liberalisation of Mexico's energy sector, including the state-owned oil monopoly Petroleos Mexicanos, one of the cornerstones of his campaign. Should this policy be enacted, it promises to be a significant boost to investment, which should have positive knock-on impact on the agribusiness sector. Pena Nieto has highlighted increasing investment in mechanised production, irrigation and farm management techniques as key to his agribusiness strategies. He has also stressed the need to clarify landownership in the countryside and to boost profitability by supporting competition and reducing regulation of the sector. Foreign policy is likely to continue to focus on boosting relations with Mexico's Central and South American neighbours, which is something the Calderon administration has also been keen to advance.

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Key Forecasts

- BMI remains optimistic about the Mexican economy. Despite continued vulnerability to external shocks, we believe economic growth will be bolstered by solid private consumption and robust investment in the coming quarters. As a result, we see Mexican GDP increasing by 3.4% year-on-year (y-o-y) in 2012 and 3.0% y-o-y in 2013. We forecast strong growth in private consumption of 4.2% in 2012 and 4.0% in 2013.
- Despite the decline in domestic rice production, we forecast consumption will remain strong in 2012 and see demand increasing by 3.7% y-o-y to 891,100 tonnes. Consumption will be supported by imports of 750,000 tonnes. In 2012/13, we see consumption growing by a further 2.7% y-o-y to 915,200 tonnes. The stability of the price of rice, in comparison with steep price rises for other grains, will boost demand. Through to 2016, we see demand growing by 14.4% compared to 2011 to reach 982,400 tonnes.
- We now forecast that extreme droughts and a decline in area harvested will see corn output decreasing by 12.0% y-o-y on the low 2010/11 total to 18.60mn tonnes in 2011/12. We see production recovering by 15.6% y-o-y to 21.50mn tonnes in 2012/13, provided climactic conditions become more favourable. However, wheat output is forecast to fall by 11.2% y-oy that year to less than 3.28mn tonnes as a result of a fall in area harvested.
- We forecast sugar consumption will fall by 0.8% y-o-y in 2012 as the trend for high-fructose corn syrup (HFCS) continues, particularly in the soft drinks industry, fuelled by high sugar prices. Over our forecast period to 2016, we expect sugar consumption to grow by 2.1% from 2011's level to 4.28mn tonnes.

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