Required Report - public distribution

**Date:** 9/7/2005

**GAIN Report Number:** MX5079

MX0000

**Mexico**

**Fresh Deciduous Fruit**

**Annual Report**

**2005**

**Approved by:**

![](media/image1.wmf)David Williams

U.S. Embassy Mexico City

**Prepared by:**

Dulce Flores

**Report Highlights:**

Apple production for MY 2005/06 is forecast at 495,000 MT, roughly 14%
lower than MY 2004/05. Mexico's Secretariat of Economy is conducting an
anti-dumping investigation on U.S. apples, the results of which are
expected in mid-September. Apple imports are forecast at 140,000 MT and
it is anticipated that the U.S. will remain the largest supplier of
apples to the Mexican market in 2005/06. MY 2005/06 pear production is
forecast at 30,000 MT. U.S. pear imports are expected to increase as
domestic production stagnates and consumer demand remains strong. Table
grape production for MY 2006 is forecast at 200,000 MT. The U.S.
continues to be the main table grape supplier to Mexico.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Mexico \[MX1\]

\[MX\]

Table of Contents

[**SECTION I. SITUATION AND OUTLOOK
3**](#section-i.-situation-and-outlook)

[APPLES 3](#apples)

[PRODUCTION 3](#production)

[CONSUMPTION 4](#consumption)

[TRADE 4](#trade)

[POLICY 5](#policy)

[MARKETING 5](#marketing)

[CONCENTRATED APPLE JUICE 6](#concentrated-apple-juice)

[PRODUCTION AND TRADE 6](#production-and-trade)

[PEAR 6](#pear)

[PRODUCTION 6](#production-1)

[CONSUMPTION 7](#consumption-1)

[TRADE 7](#trade-1)

[MARKETING 7](#marketing-1)

[TABLE GRAPES 7](#table-grapes)

[PRODUCTION 8](#production-2)

[CONSUMPTION 8](#consumption-2)

[TRADE 9](#trade-2)

[MARKETING 9](#marketing-2)

[SECTION II. STATISTICAL TABLES 10](#section-ii.-statistical-tables)

[Apples PS&D Table 10](#apples-psd-table)

[Pear, PS&D Table 11](#pear-psd-table)

[Table Grapes PS&D Table 12](#table-grapes-psd-table)

[Trade Matrixes 13](#trade-matrixes)

[Apple Prices 14](#apple-prices)

[Pear Prices 15](#pear-prices)

[Table Grape Prices 15](#table-grape-prices)

[Exchange Rate 17](#exchange-rate)

# SECTION I. SITUATION AND OUTLOOK 

# APPLES 

## PRODUCTION

The MY 2005/06 (August/July) apple production is forecast at 495,000 MT,
or 14 percent lower compared to MY 2004/05 production. Trade sources
indicate that weather conditions in Chihuahua, the main apple producing
state, have not been favorable for apple production. Freezing
temperatures, as well as hailstorms, during the month of May and during
harvesting season have damaged a number of orchards. The severe weather
has primarily affected Red Delicious varieties, which may result in
lower quality and smaller sized apples. The national average yield for
MY 2005/06 is forecast at 8.5 MT/Ha. Yields in Chihuahua are forecast at
a minimum of 12 MT/ha. Production estimates for MY 2003/04 and 2004/05
were updated with more reliable data, both from government and industry
sources. According to numerous sources, MY 2004/05 was a record
production year with good color, size, and quality. The year was also
notable for the better than expected yields of 9.7 MT/Ha. The State of
Chihuahua accounts for 42 percent of total Mexican apple production,
Coahuila accounts for 11 percent, Durango accounts for 18 percent, and
Puebla accounts for 15 percent. Producers in Chihuahua generally use
more advanced production technology and typically yield higher quality
apples than the other states.

Area planted and harvested for MY 2005/06 is forecast to decrease
slightly. This is primarily due to two reasons:

1)  Apple trees tend to have higher yields every other year. Thus
    2005/06 is considered an "off year", or low-yield year, for many
    orchards under cultivation in Mexico.

2)  Lower prices during the 2004/05 year have driven many inefficient
    producers out of the market. Large-scale and technologically
    sophisticated growers will plant or renew old orchards at higher
    tree densities. Smaller-scale growers, who are affected by price
    swings and higher costs of production, tend to abandon orchards
    under these conditions.

The new apple crop in Chihuahua will hit the market in mid-August with
the Gala variety, and the beginning of September with the Red and Golden
Delicious varieties. Area planted and harvested for MY 2004/05 was
revised downward based on official estimates. Data for MY 2003/04
remains unchanged.

Producers indicate that increasing costs of production and limited
credit could restrict future expansion. Yields are forecast to continue
increasing due to increased density in planted areas. In order to remain
competitive, producers are replacing a number of older orchards with
higher-yielding and higher-density apple trees (600 trees per hectare or
more), using advanced technology and newer irrigation systems. According
to growers, almost 70 percent of the area in Chihuahua is planted with
the Golden Delicious variety, and 30 percent with the Red Delicious
variety. The Gala variety area comprises less than 5 percent of the
total planted area in Chihuahua. According to growers, high-density
varieties account for approximately 20 percent of Chihuahua's planted
area. The remainder of the apple producing areas are planted at the more
traditional spacing of 200 trees per hectare. Most areas in Chihuahua
and Durango are irrigated.

Grower prices for Red and Golden Delicious apples in Chihuahua were
about \$5 to \$5.50 pesos/kg (US\$0.46 to \$0.51/kg) during MY 2004/05,
and growers expect higher prices for MY 2005/06 given the supply
forecast. Costs of production range from \$23,000 to \$37,000 pesos/Ha.
(US\$2,150 to \$3,458/Ha). The production cost will vary depending on
whether growers have frost protection equipment, hail protection
equipment, and new irrigation systems. According to producers,
electricity, gas, and packing costs, which depend on foreign inputs,
have increased more than 10 percent compared to MY 2003/04.

## 

## CONSUMPTION

Apple consumption for MY 2005/06 is forecast at 558,000 MT, down 15%
compared to MY 2004/05. The expected decrease in consumption is mainly
attributed to lower supplies and higher prices. At this point it is
unclear what level of anti-dumping duties the Ministry of Economy will
apply to U.S. Red and Golden Delicious apples for MY 2005/06, but an
announcement is expected by mid-September 2005. Antidumping duties
applied to U.S. Red and Golden Delicious apples have kept apple volumes
relatively low, compared to pre-2002/03 levels. However, in May 2005 the
Secretariat of Economy restarted the apple antidumping investigation.
(See Trade Section) While the outcome of the investigation is unknown,
at least until a new resolution is published, U.S. apples will continue
to have access to the Mexican market at zero duty. Implementation of a
high compensatory duty could restrict demand and push import volumes
below the current 2005/06 forecast. MY 2004/05 apple consumption
reflects the increase in availability. MY 2003/04 apple consumption data
was revised downward due to lower availability of fruit.

According to growers, demand for apples for processing has not changed
significantly this past year, largely due to reduced demand from the
juice industry. Apples for the processing industry for MY 2005/06 are
forecast to decrease to approximately 87,000 MT due to lower production
levels, but the final amount will depend upon international prices for
concentrated apple juice. However, currently, the outlook for these
prices is not favorable. The estimate for apple supplies for processing
for MY 2003/04 and MY 2004/05 remains unchanged.

From January to March domestic apple production competes with other
fruits like mango and papaya. Prices for domestic apples were slightly
lower during 2005 compared to 2004 due to higher domestic production.
U.S. apple imports had a significant market presence between April 2005
and the onset of harvest, and were sold at lower prices compared to
2004.

## TRADE

The forecast for apple imports for MY 2005/06 is estimated at 150,000
MT. The Government of Mexico is expected to announce the results of its
current dumping investigation by mid-September 2005. 2005/06 import
volumes will likely depend on the timing of the Government's decision
and the level of the compensatory duties, if any. Nevertheless, the
tighter domestic supply situation should help to support import volumes
in 2005/06. Overall, imported apples from the United States have
decreased in volume due to the anti-dumping duty of 46.85 percent
imposed on U.S. Red and Golden Delicious apples in August 2002 (see
report MX2120).

The estimate for apple imports for MY 2004/05 remains unchanged. Data
reflects an increase of almost 17 percent compared to MY 2003/04. More
apples were imported from the United States due to:

1.  Healthy demand in Mexico;

2.  A larger U.S. apple crop;

3.  A drop in Asian demand for U.S. apples; and

4.  A zero duty on U.S. Red and Golden Delicious apples since May 2005.

The suspension of the anti-dumping duty of 46.58 percent for most U.S.
Red and Golden Delicious apples stimulated imports. When this occurred,
U.S. apples realized a larger share of the market, as Chilean apples
suffered from quarantine problems. Imports for MY 2003/04 remain
unchanged.

On December 29, 2004, the Secretariat of Economy (SE) published in the
*Diario Oficial* (Federal Register) an announcement suspending the
application of the 46.58-percent duty on imported U.S. Red and Golden
Delicious apples from the Pacific Northwest and established a new
reference price system for members of the Northwest Fruit Exporters
(NFE) organization. However, in February 2005 the First Circuit Court
determined that there was a violation in setting this reference price
agreement and ruled that the Secretariat of Economy (SE) must re-start
the antidumping investigation it conducted in 1997. The First Circuit
Court also ruled that members of the Northwest Fruit Exporters could
export apples to Mexico without any duties. On May 26, 2005, SE
announced the new antidumping investigation and eliminated the dumping
duties (See report MX5050).

Other U.S. states, like Virginia and Michigan, continue exporting
limited volumes of Golden and Red Delicious apples to Mexico even though
the 46.85 duty still applies to them. Other apple varieties like Gala,
Rome Beauty, Jonagold, and Pink Lady, which are not subject to the
antidumping duty, are being imported at more affordable prices, but in
smaller quantities.

Red and Golden Delicious varieties continue to account for almost all
U.S. apple exports to Mexico. While Mexican consumers like the size and
color of U.S. apples, Mexican apples are said to be sweeter. The U.S.
apple industry will continue to face strong competition from other
countries, like Chile. While Mexico is expected to complete a
phytosanitary protocol to import apples from China, the domestic
industry is not expecting significant competition, as the variety from
China, Fuji, is not widely accepted by the domestic consumer. Apples
from Argentina and South Africa continue to be imported, but not in
significant volumes.

## POLICY

The NAFTA tariffs for U.S. and Canadian apples were completely lifted as
of January 1, 2003, bringing the duty to zero. Under the Chile-Mexico
free trade agreement, imported Chilean apples have a TRQ of 3,034,647
Kg. at a 1.7 percent duty for 2005. However, starting on January 1^st^
2006, imports of Chilean fresh apples will be duty free and not subject
to a quota. Apples from other countries are subject to a 20-percent
duty. During a trade mission to China, the Mexican government
established protocols and agreements with the Chinese government to
begin trade operations. Among the products to be imported from China to
Mexico are fruits and vegetables, including apples. The Mexican
government is preparing protocols and phytosanitary measures for Chinese
apples, which could be ready in the very near future, according to
official information.

## MARKETING

Despite the possible re-imposition of anti-dumping duties, the United
States is expected to remain the main apple supplier to the Mexican
market. The U.S. apple industry's continued marketing and in-store
promotion efforts have significantly contributed to creating a market
for U.S. apples in Mexico. Strong U.S. apple import months are from
January to May, although the U.S. does start shipping in smaller volumes
in November. Canadian apples are imported from November to January, and
Chilean apples are typically imported from March to June. Chilean apples
do not compete directly with Mexican apples, as they do not hit the
market at the height of Mexico's marketing year. Mexican apples are
strongly marketed from September through December, but many are kept in
cold storage to be marketed in the early months of the year, thus
competing more directly with U.S., rather than Chilean apples.

Mexican consumers still prefer the Red and Golden Delicious varieties to
any others. Commercially, these two varieties have a competitive
advantage over other varieties because of their longer shelf life.
Another variety widely demanded by consumers is the Rome Beauty, which
is mainly used for baking and cooking. Lately the Royal Gala has become
more attractive to the Mexican consumer and is being sold in most
supermarkets. Chilean producers are also marketing Royal Gala in Mexico.

Mexican producers continue doing market promotions and are advertising
Mexican apples on the radio and certain TV spots. Chilean producers have
also been working aggressively to penetrate the Mexican market and have
introduced several varietal characteristics in an effort to target
different population groups. The Chilean promotion strategy focuses on
price more than on quality. According to traders, Chile is investing in
in-store demonstrations and advertisements. Argentina and South Africa
continue to export small quantities to Mexico as well.

# 

# CONCENTRATED APPLE JUICE

## PRODUCTION AND TRADE

Reliable concentrated apple juice (CAJ) production numbers are difficult
to obtain, as there is no Mexican statistical data available on this
product. The industry tends to keep partial information, most of which
is proprietary. According to industry sources, there are about seven
primary processing plants in Mexico, of which the most important are
four plants in Chihuahua. The industry indicated that since the entry of
China\'s CAJ in the international market, Mexico's production has
declined significantly due to a reduced market share in the U.S.
Furthermore, the industry indicates they have more difficulties in
obtaining fruit at affordable prices since apple growers have increased
quality for fresh fruit. During MY 2004/05, fruit for the processing
industry was priced at about US\$74-\$75 per MT. Since apple production
for MY 2005/06 is expected at lower volumes, fruit for processing prices
could be expensive for the industry. There is no information available
on CAJ production, but it is expected to continue at low levels for
export purposes, unless international prices increase.

The United States is Mexico's largest CAJ market. However, according to
Mexican trade data, CY 2004 exports show a decrease in Mexican exports
of CAJ to the United States of 39 percent. One processing plant in
Chihuahua is still producing some CAJ for the export market and they
normally export the juice to the United States. Although Mexico
traditionally imports little CAJ, imports are increasing because of good
international prices.

# PEAR

## PRODUCTION

Pear production in Mexico is very limited, therefore the Secretariat of
Agriculture only publishes pear production data on an annual basis.
Total pear production is forecast at 30,000 MT for MY2005/06
(July/June), a decrease compared to MY 2004/05, due to the alternate
bearing cycle of the trees. In general, pear production is not expected
to show significant increases, as growers are not heavily investing in
this crop due to the high cost of production and low international and
domestic prices. Approximately 85 percent of the area planted in Mexico
is non-irrigated, and rainfall was average during this past growing
season. Michoacan and Puebla are Mexico's main pear producing states,
accounting for 75 percent of total Mexican production. The State of
Puebla has marginally increased pear plantings, but this has been almost
offset by a decrease in non-irrigated and low-yielding areas planted in
Michoacan. Pear production estimates for MY 2004/05 were revised upward
due to higher yields than expected. Data for MY 2003/04 remains
unchanged.

Lack of investment, high costs of production, scarce water supplies in
pear producing regions, and disease problems have limited production
growth. Some growers, however, have begun to experiment with planting
more disease-resistant and longer shelf-life varieties. Area planted for
MY 2005/06 is forecast to remain unchanged from MY 2004/05 area. Area
planted and harvested for MY 2004/05 was revised upward due to a slight
increase in plantings in some states. Data for area planted and
harvested for MY 2003/04 remains unchanged.

## CONSUMPTION

Domestic supply continues to rely on imports, mainly from the United
States. Pear consumption for MY 2005/06 is forecast at 108,000 MT due to
expected lower retail prices. Pear consumption for MY 2004/05 was
revised downward due to higher imported prices and lower fruit quality.
Pear consumption estimates for MY 2003/04 remain unchanged.

Wholesale prices for U.S. pears in Mexico were higher for MY 2004/05
compared to MY 2003/04 prices. Prices for D'anjou pears began almost 9
percent higher in October 2005 compared to October 2004, at
approximately US\$22 per 18-kg box and ending in June 2005 at
approximately US\$28.00 per box. Retail prices in supermarkets by June
2005 were about US\$2.10/kg for D'anjou pears and US\$2.60/kg for Bosc
pears. Anjou pears continue to be the most sought after variety in the
market, followed by the Bosc, Bartlett and the Red Anjou varieties.
Other varieties of pears are not yet in high demand by consumers in
Mexico.

## TRADE

Pear imports for MY 2005/06 are forecast to increase to 80,000 MT, due
to healthy demand and expected affordable consumer prices. Pear import
estimates for MY 2004/05 were revised downward, due to higher prices for
imported pears resulting from reported problems with quality that
reduced import volumes. U.S. Bartlett pears are usually imported during
July, August, and September, while U.S. Anjou pears are imported towards
the end of September and October. The pear import estimate for MY
2003/04 remains unchanged. The presence of Chilean and Argentinean pears
is limited in the Mexican market, but they are of fair to good quality
and were priced lower than U.S. pears in 2005. Under the different trade
agreements, the import duty on pears from the U.S., Chile, and Argentina
is zero.

## MARKETING

The United States remains Mexico's main pear supplier. Market promotion
efforts for U.S. pears continue in several Mexican cities, supermarkets,
and street markets. However, the wholesale markets remain the most
important fruit distribution channel in Mexico. According to traders,
in-store promotions have helped to increase sales. Most of the imported
pears are from Washington, Oregon, and California. Of total imports,
U.S. pears account for approximately 90 percent of the market, while
imports from Chile and Argentina represent approximately 4 percent each.

Due to limited production, Mexican pears are almost exclusively sold
through local, small markets; very few are sold through supermarkets.
One of the Mexican pear varieties, which consumers tend to prefer, is
the Kiefer variety, better known as Pera Piña. Low production, however,
precludes the Pera Piña from having a significant market presence.

# TABLE GRAPES

## PRODUCTION

Total table grape production for MY 2006 (Jan/Dec) is forecast at
200,000 MT, a decrease from MY 2005 due to an off year cycle. Total
production is difficult to determine since price relationships between
table grapes, raisin grapes, and industrial grapes in any given period
might attract more grapes into, or out of, each market. Table grape
production for MY 2005 was revised upward based on industry data
reflecting good weather conditions and higher yields in Sonora, the main
state producing table grapes. However, some rainfall and high
temperatures during the harvesting season affected the quality of the
grapes. MY 2004 official production data was revised downwards,
reflecting lower than estimated production due to adverse weather
conditions.

Area planted for MY 2006 is forecast to be slightly higher compared to
MY 2005 area planted. Furthermore producers in Sonora, the major
producing state, are working to increase yields by improving crop
management, more than by increasing area planted. Area planted and
harvested for MY 2005 were revised upward as some producers were
encouraged to plant a few more hectares due to generally better market
conditions. Area planted for MY 2004 was revised downward and area
harvested was revised upward based on official estimates. All area for
table grapes is irrigated.

The state of Sonora accounts for almost 80 percent of the total area
planted to table grapes. Market and growing conditions are favorable,
but a lack of water continues to limit more aggressive expansion. The
national average yield forecast for MY 2006 is expected at 11 MT/Ha, but
is largely dependent on cultural practices. The national average yield
for MY 2005 is estimated to be at 13 MT/Ha due to better weather
conditions in Sonora. Sonora has an average yield of 12 MT/Ha. According
to producers, in 2005 the cost of production in Sonora was between
US\$7,000/Ha and US\$9,000/Ha, depending on inputs. Producers indicate
that expansion is limited mainly by low water availability from aquifers
in Sonora. As a result, producers are trying to become more efficient by
increasing yields instead of increasing acreage. The high cost of
production and high interest rates for credit also limit table grape
expansion. In fact, producers state that the only credit to which they
have access comes from U.S. brokers and distributors, who give them
advance payments for harvesting and packing table grapes. Some of the
main varieties that Mexico produce are: Perlette, Flame, Sugraone, and
Red Globe.

## CONSUMPTION

Table grape consumption for MY 2006 is forecast downward at 130,000 MT.
The volume of Mexican grapes in the market will ultimately depend on the
volume exported, as producers tend to serve the international market
first. Consumers will keep buying grapes as long as prices continue to
be affordable. The consumption estimate for MY 2005 was revised upward
as supplies of table grapes in the domestic market were larger due to
higher production, which resulted in lower prices compared to MY 2004.
Data for MY 2004 table grape consumption was revised downward from
previous estimates, due to lower domestic and imported supplies and
higher prices.

Compared to the July 2004 prices of US\$9.25/9-kg box, wholesale prices
in July of 2005 for domestic Perlette grapes were significantly lower,
at US\$7.65/9-kg box. Domestic prices are expected to remain largely
unchanged from 2005. Some large supermarkets are marking prices down as
quality has diminished. Prices for imported Red Globe grapes were higher
during 2005 compared to 2004. The Perlette variety is the most widely
preferred by consumers, followed by the Red Globe and the Superior
varieties.

## TRADE

Table grape imports for MY 2006 are forecast at 80,000 MT, a 5-percent
increase from MY 2004, driven by lower domestic production. Table grape
imports for MY 2005 were revised downward due to decreased demand for
imported grapes resulting from greater domestic availability of grapes
at lower prices. Table grape imports for MY 2004 reflect official data.
U.S. and Chilean imports have a zero duty and both countries continue to
increase exports to the Mexican market. According to traders, U.S.
promotional efforts to export table grape varieties to Mexico, other
than Red Globe or Thompson, are resulting in increased sales. U.S. table
grapes can only be imported from California due to Mexico's
phytosanitary restrictions on table grapes from other U.S. states.

Table grape exports for MY 2006 are forecast at 150,000 MT, assuming
healthy international demand. Export estimates for MY 2005 remained
unchanged at 160,000 MT, reflecting a very good export year. Export
estimates for MY 2004 were revised slightly upward, based on Mexican
trade data. Most of Mexico's table grapes are exported to the United
States. Growers indicated that export f.o.b. prices at the beginning of
the season - May 2005 -- were, on average, about US\$30/8-kg box of
perlettes and approximately US\$32/box of flame seedless. However
because peak season in the U.S. starts at the end of May, by the end of
the month prices had plummeted to approximately US\$12/box for perlette
and US\$14/box for flame. Mexican export prices usually range between
US\$14 and \$16/box.

U.S. and Chilean table grape production seasons differ and there is no
significant direct competition between grapes from these countries. U.S.
suppliers export to Mexico from January to February and from August to
December, before and after the Mexican season. Chile usually exports
from January to April and from June to July. Under the Mexico-Chile Free
Trade Agreement, Chilean table grapes enter duty free from January 1 to
April 14, and from June 1 to December 31. Mexican importers must obtain
an import permit from April 15 to May 31. However, starting in 2006,
Chilean table grapes will be able to enter duty free all year round.

The Mexico--European Union (EU) Trade Agreement, signed in 2000, has a
duty phase-out plan wherein the grape tariff on Mexican table grapes
exported to the EU will be reduced from 12.6 percent to zero by 2008.
Mexico has not been able to take full advantage of this agreement since
most of its grapes are being exported to the U.S. Mexico could also be
exporting grapes to China in 2006, as the Mexican government is
establishing protocol and phytosanitary agreements to that end.

## MARKETING

The Unites States is expected to remain Mexico's main supplier of table
grapes, largely as a result of market promotion efforts by the U.S.
table grape exporters. U.S. promotional efforts of different table grape
varieties have resulted in an increase in imports into the Mexican
market. Chile, on the other hand, puts very limited resources into
promoting its grapes in Mexico.

# SECTION II. STATISTICAL TABLES

## Apples PS&D Table

  ---------------------- ----------- ---------- ------------ ---------- ------------ ----------
  **Mexico**                                                                         

  Apples, Fresh                                              (HA) (1000              
                                                             TREES)(                 
                                                             MT)                     

                         **2003                 **2004                  **2005       
                         Revised**              Estimate**              Forecast**   

                         USDA        Post       USDA         Post       USDA         Post
                         Official    Estimate   Official     Estimate   Official     Estimate
                         \[Old\]     \[New\]    \[Old\]      \[New\]    \[Old\]      \[New\]

  Market Year Begin      08/2003                08/2004                 08/2005      

  Area Planted           62995       62995      63180        62694      0            62400

  Area Harvested         60973       60973      61100        59095      0            58000

  Bearing Trees          14145       14145      14175        13908      0            13456

  Non-Bearing Trees      469         469        482          834        0            1020

  Total Trees            14614       14614      14657        14742      0            14476

  Commercial Production  572000      486850     503000       565906     0            490000

  Non-Comm. Production   7000        7000       7000         7000       0            5000

  TOTAL Production       579000      493850     510000       572906     0            495000

  TOTAL Imports          149338      149338     174000       174000     0            150000

  TOTAL SUPPLY           728338      643188     684000       746906     0            645000

  Domestic Fresh Consump 636338      551188     592000       654906     0            558000

  Exports, Fresh Only    0           0          0            0          0            0

  For Processing         92000       92000      92000        92000      0            87000

  Withdrawal From Market 0           0          0            0          0            0

  TOTAL UTILIZATION      728338      643188     684000       746906     0            645000

                                                                                     
  ---------------------- ----------- ---------- ------------ ---------- ------------ ----------

## Pear, PS&D Table

  ----------------- ----------- ---------- ------------ ---------- ------------ ----------
  **Mexico**                                                                    

  Pears, Fresh                                          (HA) (1000              
                                                        TREES)                  
                                                        (MT)                    

                    **2003                 **2004                  **2005       
                    Revised**              Estimate**              Forecast**   

                    USDA        Post       USDA         Post       USDA         Post
                    Official    Estimate   Official     Estimate   Official     Estimate
                    \[Old\]     \[New\]    \[Old\]      \[New\]    \[Old\]      \[New\]

  Market Year Begin 07/2003                07/2004                 07/2005      

  Area Planted      4659        4659       4660         5060       0            5060

  Area Harvested    4530        4530       4550         4871       0            4800

  Bearing Trees     946         946        950          1018       0            1003

  Non-Bearing Trees 26          26         22           40         0            54

  Total Trees       972         972        972          1058       0            1057

  Commercial        27993       27993      28500        31872      0            29000
  Production                                                                    

  Non-Comm.         1000        1000       1000         1000       0            1000
  Production                                                                    

  TOTAL Production  28993       28993      29500        32872      0            30000

  TOTAL Imports     85712       85712      87000        68000      0            80000

  TOTAL SUPPLY      114705      114705     116500       100872     0            110000

  Domestic Fresh    112705      112705     114500       98872      0            108000
  Consump                                                                       

  Exports, Fresh    0           0          0            0          0            0
  Only                                                                          

  For Processing    2000        2000       2000         2000       0            2000

  Withdrawal From   0           0          0            0          0            0
  Market                                                                        

  TOTAL UTILIZATION 114705      114705     116500       100872     0            110000
  ----------------- ----------- ---------- ------------ ---------- ------------ ----------

## Table Grapes PS&D Table

  ----------------- ----------- ---------- ------------ ---------- ------------ ----------
  **Mexico**                                                                    

  Grapes, Table,                                                   (HA)(MT)     
  Fresh                                                                         

                    **2003                 **2004                  **2005       
                    Revised**              Estimate**              Forecast**   

                    USDA        Post       USDA         Post       USDA         Post
                    Official    Estimate   Official     Estimate   Official     Estimate
                    \[Old\]     \[New\]    \[Old\]      \[New\]    \[Old\]      \[New\]

  Market Year Begin 01/2004                01/2005                 01/2006      

  Area Planted      18700       18625      18700        19000      0            19300

  Area Harvested    17000       18166      17100        18200      0            18400

  Commercial        165500      152785     190000       229000     0            198500
  Production                                                                    

  Non-Comm.         1500        1500       1800         1800       0            1500
  Production                                                                    

  TOTAL Production  167000      154285     191800       230800     0            200000

  TOTAL Imports     82000       69445      90000        76000      0            80000

  TOTAL SUPPLY      249000      223730     281800       306800     0            280000

  Domestic Fresh    129200      103730     121800       146800     0            130000
  Consump                                                                       

  Exports, Fresh    119800      120000     160000       160000     0            150000
  Only                                                                          

  For Processing    0           0          0            0          0            0

  Withdrawal From   0           0          0            0          0            0
  Market                                                                        

  TOTAL UTILIZATION 249000      223730     281800       306800     0            280000
  ----------------- ----------- ---------- ------------ ---------- ------------ ----------

## Trade Matrixes

+-----------------+-----------+----+-----------------+-----------+----+
| # Apples        |           |    | **Unit: Metric  |           |    |
|                 |           |    | Tons**          |           |    |
+-----------------+-----------+----+-----------------+-----------+----+
| **Exports for   |           |    | **Imports for   |           |    |
| MY 2004/05      |           |    | MY 2004/05      |           |    |
| *(A             |           |    | *(Aug-July\*)*  |           |    |
| ug-July\*****)* |           |    | from:**         |           |    |
| **to:**         |           |    |                 |           |    |
+-----------------+-----------+----+-----------------+-----------+----+
| **U.S.**        | **0**     |    | **U.S.**        | **        |    |
|                 |           |    |                 | 104,748** |    |
+-----------------+-----------+----+-----------------+-----------+----+
| **EL SALVADOR** | **81**    |    | **CHILE**       | *         |    |
|                 |           |    |                 | *12,967** |    |
+-----------------+-----------+----+-----------------+-----------+----+
| **BELIZE**      | **111**   |    | **CANADA**      | **7,135** |    |
+-----------------+-----------+----+-----------------+-----------+----+
| **OTHER**       | **0**     |    | **OTHER**       | **413**   |    |
+-----------------+-----------+----+-----------------+-----------+----+
| **TOTAL**       | **192**   |    | **TOTAL**       | **        |    |
|                 |           |    |                 | 125,263** |    |
+-----------------+-----------+----+-----------------+-----------+----+

## 

## 

+----------------+-----------+----+----------------+-----------+----+
| **Pears**      |           |    | **Unit: Metric |           |    |
|                |           |    | Tons**         |           |    |
+----------------+-----------+----+----------------+-----------+----+
| **Exports for  |           |    | **Imports for  |           |    |
| MY 2004/05     |           |    | MY 2004/05     |           |    |
| *              |           |    | *(Jul-         |           |    |
| (Jul-Jun\*)*** |           |    | Jun\*)*from:** |           |    |
|                |           |    |                |           |    |
| **to:**        |           |    |                |           |    |
+----------------+-----------+----+----------------+-----------+----+
| **U.S.**       | **3**     |    | **U.S.**       | *         |    |
|                |           |    |                | *57,720** |    |
+----------------+-----------+----+----------------+-----------+----+
| **BELIZE**     | **19**    |    | **ARGENTINA**  | **6,577** |    |
+----------------+-----------+----+----------------+-----------+----+
|                |           |    | **CHILE**      | **1,664** |    |
+----------------+-----------+----+----------------+-----------+----+
| **OTHER**      | **4**     |    | **OTHER**      |           |    |
+----------------+-----------+----+----------------+-----------+----+
| **TOTAL**      | **26**    |    | **TOTAL**      | *         |    |
|                |           |    |                | *65,961** |    |
+----------------+-----------+----+----------------+-----------+----+

## 

  ----------------- ------------- ----- ----------------- ------------ -----
  **Table grapes**                      **Unit: Metric                 
                                        Tons**                         

  **Exports for MY                      **Imports for MY               
  2004                                  2004 *(Jan-Dec)*               
  *(Jan-Dec****)*                       from:**                        
  **to:**                                                              

  **U.S.**          **119,303**         **U.S.**          **38,706**   

                                                                       

  **HONG KONG**     **476**             **CHILE**         **30,739**   

  **OTHER**         **231**             **OTHER**         **0**        

  **TOTAL**         **120,010**         **TOTAL**         **69,445**   
  ----------------- ------------- ----- ----------------- ------------ -----

## 

## 

  ------------------- ----------- ----- ----------------- ------------ -----
  **Table grapes**                      **Unit: Metric                 
                                        Tons**                         

  **Exports for MY                      **Imports for MY               
  2005                                  2005                           
  *(Jan-Dec\*****)*                     *(Jan-Dec\*)*                  
  **to:**                               from:**                        

  **U.S.**            **0**             **U.S.**          **98**       

                                                                       

  **BELIZE**          **7**             **CHILE**         **25,480**   

  **OTHER**           **0**             **OTHER**         **0**        

  **TOTAL**           **7**             **TOTAL**         **25,578**   
  ------------------- ----------- ----- ----------------- ------------ -----

**SOURCE**: Global Trade Information Services, Inc. World Trade Atlas,
Mexico Edition, April 2005

\* As of May 2005

## Apple Prices

+--------------+---------------+---------------+----------------------+
| **[Average   |               |               |                      |
| Monthly      |               |               |                      |
| Wholesale    |               |               |                      |
| Apple Import |               |               |                      |
| Prices]{.    |               |               |                      |
| smallcaps}** |               |               |                      |
|              |               |               |                      |
| **[Red       |               |               |                      |
| Delicious    |               |               |                      |
| Pesos        |               |               |                      |
| /kilogram]{. |               |               |                      |
| smallcaps}** |               |               |                      |
+--------------+---------------+---------------+----------------------+
| Month        | 2004          | 2005          | Change %             |
+--------------+---------------+---------------+----------------------+
| January      |               |               |                      |
+--------------+---------------+---------------+----------------------+
| February     |               |               |                      |
+--------------+---------------+---------------+----------------------+
| March        | 17.04         |               |                      |
+--------------+---------------+---------------+----------------------+
| April        | 16.33         |               |                      |
+--------------+---------------+---------------+----------------------+
| May          | 16.40         | 12.56         | (23.41)              |
+--------------+---------------+---------------+----------------------+
| June         | 17.04         | 12.67         | (25.64)              |
+--------------+---------------+---------------+----------------------+
| July         | 17.41         | 12.20         | (29.92)              |
+--------------+---------------+---------------+----------------------+
| August       | 16.99         | 12.22\*       | (28.07)              |
+--------------+---------------+---------------+----------------------+
| September    | 17.31         |               |                      |
+--------------+---------------+---------------+----------------------+
| October      |               |               |                      |
+--------------+---------------+---------------+----------------------+
| November     |               |               |                      |
+--------------+---------------+---------------+----------------------+
| December     |               |               |                      |
+--------------+---------------+---------------+----------------------+
| CIF-Mexico   |               |               |                      |
| City         |               |               |                      |
+--------------+---------------+---------------+----------------------+

+--------------+---------------+---------------+----------------------+
| **[Average   |               |               |                      |
| Monthly      |               |               |                      |
| Wholesale    |               |               |                      |
| Apple        |               |               |                      |
| Domestic     |               |               |                      |
| Prices]{.    |               |               |                      |
| smallcaps}** |               |               |                      |
|              |               |               |                      |
| **[Red       |               |               |                      |
| Delicious    |               |               |                      |
| Pesos        |               |               |                      |
| /kilogram]{. |               |               |                      |
| smallcaps}** |               |               |                      |
+--------------+---------------+---------------+----------------------+
| Month        | 2004          | 2005          | Change %             |
+--------------+---------------+---------------+----------------------+
| January      | 11.62         | 9.60          | (17.38)              |
+--------------+---------------+---------------+----------------------+
| February     | 12.38         | 9.88          | (20.19)              |
+--------------+---------------+---------------+----------------------+
| March        | 12.50         | 9.56          | (23.52)              |
+--------------+---------------+---------------+----------------------+
| April        |               | 9.32          |                      |
+--------------+---------------+---------------+----------------------+
| May          |               |               |                      |
+--------------+---------------+---------------+----------------------+
| June         |               |               |                      |
+--------------+---------------+---------------+----------------------+
| July         |               |               |                      |
+--------------+---------------+---------------+----------------------+
| August       |               |               |                      |
+--------------+---------------+---------------+----------------------+
| September    | 10.93         |               |                      |
+--------------+---------------+---------------+----------------------+
| October      | 10.50         |               |                      |
+--------------+---------------+---------------+----------------------+
| November     | 10.50         |               |                      |
+--------------+---------------+---------------+----------------------+
| December     | 10.20         |               |                      |
+--------------+---------------+---------------+----------------------+
| CIF-Mexico   |               |               |                      |
| City         |               |               |                      |
+--------------+---------------+---------------+----------------------+

Source: Sevicio Nacional de Informacion de Mercados

2004 Exchange Rate Avg.: U.S.\$1.00 = 11.29 pesos

August 17, 2005 Exchange Rate: U.S.\$1.00 = 10.58 pesos

\*As of Third Week of August 2005

Shaded area indicates that prices were not available.

## Pear Prices

+--------------+---------------+---------------+----------------------+
| **[Average   |               |               |                      |
| Monthly      |               |               |                      |
| Wholesale    |               |               |                      |
| PEAR Import  |               |               |                      |
| Prices]{.    |               |               |                      |
| smallcaps}** |               |               |                      |
|              |               |               |                      |
| **[D'ANJOU   |               |               |                      |
| Pesos        |               |               |                      |
| /kilogram]{. |               |               |                      |
| smallcaps}** |               |               |                      |
+--------------+---------------+---------------+----------------------+
| Month        | 2004          | 2005          | Change %             |
+--------------+---------------+---------------+----------------------+
| January      | 13.58         | 16.04         | 18.11                |
+--------------+---------------+---------------+----------------------+
| February     | 12.92         | 16.09         | 24.53                |
+--------------+---------------+---------------+----------------------+
| March        | 12.78         | 17.19         | 34.50                |
+--------------+---------------+---------------+----------------------+
| April        | 13.79         | 17.22         | 24.87                |
+--------------+---------------+---------------+----------------------+
| May          | 15.67         | 17.76         | 13.33                |
+--------------+---------------+---------------+----------------------+
| June         | 16.84         | 17.04         | 1.18                 |
+--------------+---------------+---------------+----------------------+
| July         | 17.42         | 16.67         | (4.30)               |
+--------------+---------------+---------------+----------------------+
| August       |               |               |                      |
+--------------+---------------+---------------+----------------------+
| September    |               |               |                      |
+--------------+---------------+---------------+----------------------+
| October      | 15.00         |               |                      |
+--------------+---------------+---------------+----------------------+
| November     | 16.34         |               |                      |
+--------------+---------------+---------------+----------------------+
| December     | 16.11         |               |                      |
+--------------+---------------+---------------+----------------------+
| CIF-Mexico   |               |               |                      |
| City         |               |               |                      |
+--------------+---------------+---------------+----------------------+

## 

## Table Grape Prices

+--------------+----------------+------------------+-----------------+
| **[Average   |                |                  |                 |
| Monthly      |                |                  |                 |
| Wholesale    |                |                  |                 |
| Grape Import |                |                  |                 |
| Prices]{.    |                |                  |                 |
| smallcaps}** |                |                  |                 |
|              |                |                  |                 |
| **[Globe     |                |                  |                 |
| Pesos        |                |                  |                 |
| /kilogram]{. |                |                  |                 |
| smallcaps}** |                |                  |                 |
+--------------+----------------+------------------+-----------------+
| Month        | 2004           | 2005             | Change %        |
+--------------+----------------+------------------+-----------------+
| January      | 23.07          | 26.58            | 15.21           |
+--------------+----------------+------------------+-----------------+
| February     | 17.78          | 21.12            | 18.78           |
+--------------+----------------+------------------+-----------------+
| March        | 14.98          | 13.74            | (8.27)          |
+--------------+----------------+------------------+-----------------+
| April        | 15.97          | 12.80            | (19.84)         |
+--------------+----------------+------------------+-----------------+
| May          | 16.22          | 15.33            | (5.48)          |
+--------------+----------------+------------------+-----------------+
| June         | 19.10          | 17.48            | (8.48)          |
+--------------+----------------+------------------+-----------------+
| July         | 19.00          | 15.56            | (18.10)         |
+--------------+----------------+------------------+-----------------+
| August       | 18.13          |                  |                 |
+--------------+----------------+------------------+-----------------+
| September    | 19.40          |                  |                 |
+--------------+----------------+------------------+-----------------+
| October      | 17.38          |                  |                 |
+--------------+----------------+------------------+-----------------+
| November     | 23.44          |                  |                 |
+--------------+----------------+------------------+-----------------+
| December     | 28.00          |                  |                 |
+--------------+----------------+------------------+-----------------+
| CIF-Mexico   |                |                  |                 |
| City         |                |                  |                 |
+--------------+----------------+------------------+-----------------+

Source: Sevicio Nacional de Informacion de Mercados

2004 Exchange Rate Avg.: U.S.\$1.00 = 11.29 pesos

July 15, 2005 Exchange Rate: U.S.\$1.00 = 10.63 pesos

+--------------+-----------------+-----------------+-----------------+
| [**Average   |                 |                 |                 |
| Monthly      |                 |                 |                 |
| Wholesale    |                 |                 |                 |
| Grape        |                 |                 |                 |
| Domestic     |                 |                 |                 |
| P**rices]    |                 |                 |                 |
| {.smallcaps} |                 |                 |                 |
|              |                 |                 |                 |
| **[Perlette  |                 |                 |                 |
| Pesos        |                 |                 |                 |
| /kilogram]{. |                 |                 |                 |
| smallcaps}** |                 |                 |                 |
+--------------+-----------------+-----------------+-----------------+
| Month        | 2004            | 2005            | Change %        |
+--------------+-----------------+-----------------+-----------------+
| January      |                 |                 |                 |
+--------------+-----------------+-----------------+-----------------+
| February     |                 |                 |                 |
+--------------+-----------------+-----------------+-----------------+
| March        |                 |                 |                 |
+--------------+-----------------+-----------------+-----------------+
| April        |                 |                 |                 |
+--------------+-----------------+-----------------+-----------------+
| May          |                 |                 |                 |
+--------------+-----------------+-----------------+-----------------+
| June         | 12.22           | 14.46           | 18.33           |
+--------------+-----------------+-----------------+-----------------+
| July         | 10.61           | 8.28            | (26.95)         |
+--------------+-----------------+-----------------+-----------------+
| August       |                 |                 |                 |
+--------------+-----------------+-----------------+-----------------+
| September    |                 |                 |                 |
+--------------+-----------------+-----------------+-----------------+
| October      |                 |                 |                 |
+--------------+-----------------+-----------------+-----------------+
| November     |                 |                 |                 |
+--------------+-----------------+-----------------+-----------------+
| December     |                 |                 |                 |
+--------------+-----------------+-----------------+-----------------+
| CIF-Mexico   |                 |                 |                 |
| City         |                 |                 |                 |
+--------------+-----------------+-----------------+-----------------+

Source: Sevicio Nacional de Informacion de Mercados

> 2004 Exchange Rate Avg.: U.S.\$1.00 = 11.29 pesos

July 15, 2005 Exchange Rate: U.S.\$1.00 = 10.63 pesos

Shaded area indicates that prices were not available

## Exchange Rate

![](media/image2.wmf)