Required Report - public distribution **Date:** 11/5/2002

**GAIN Report Number:** MX2157

MX2156

### Mexico

**Grain and Feed**

**Sorghum and Corn Update**

2002

**Approved by:**

![](media/image1.wmf)William L. Brant

#### U.S. Embassy Mexico City

**Prepared by:**

Benjamin Juarez

**Report Highlights:**

The forecast for Mexico\'s MY 2002/03 sorghum production has been
lowered, due to reduced planted area. Also, MY 2001/02 corn imports
estimates have been raised, reflecting preliminary final official data.
Similarly, corn exports for MY 2001/02 have been raised to 92,000 MT,
due to a new support program to export corn. Also, the corn export
forecast for MY 2002/03 was revised upward.

Includes PSD Changes: Yes

Includes Trade Matrix: No

Unscheduled Report

Mexico \[MX1\], \[MX\]

  ---------------------- ------------ ----------- ------------- ----------- ---------- -----------
  **PSD Table**                                                                        

  **Country**            **Mexico**                                                    

  **Commodity**          **Corn**                               (1000                  
                                                                HA)(1000               
                                                                MT)                    

                         Revised      2000        Preliminary   2001        Forecast   2002

                         Old          New         Old           New         Old        New

  Market Year Begin      10/2000                  10/2001                   10/2002    

  Area Harvested         7145         7145        7780          7780        7700       8000

  Beginning Stocks       2336         2336        2167          2568        1752       2737

  Production             17920        17920       19600         20394       19000      19000

  TOTAL Mkt. Yr. Imports 5928         6319        4000          4197        6000       6000

  Oct‑Sep Imports        5928         6319        4000          4197        6000       6000

  Oct‑Sep Import U.S.    5928         6319        0             4197        0          6000

  TOTAL SUPPLY           26184        **26575**   25767         **27159**   26752      **27737**

  TOTAL Mkt. Yr. Exports 17           7           15            92          15         100

  Oct‑Sep Exports        17           7           15            92          15         100

  Feed Dom. Consumption  8800         8800        8800          8800        9800       9800

  TOTAL Dom. Consumption 24000        24000       24000         24330       25000      24850

  Ending Stocks          2167         2568        1752          2737        1737       2637

  TOTAL DISTRIBUTION     26184        **26575**   25767         **27159**   26752      **27737**
  ---------------------- ------------ ----------- ------------- ----------- ---------- -----------

**Production**

The 2001/02 corn production estimate has been revised up slightly, as
good weather conditions during the growing season increased yield
prospects. It should be noted that private and official sources
coincided with this production estimation. Moreover, FAS/Mexico uses
official Mexican government statistics for historical purposes.
Production estimates for MY 2000/01 and MY 2002/03 remain unchanged.

**Consumption**

Consumption estimates for MY 2001/02 were revised upward to 24.330 MMT
based on preliminary ending data from private sources and in accordance
with general population growth. It should be noted that despite the HFCS
issue (see MX 2133), the demand of imported yellow corn by the starch
industry has not been adversely affected in CY 2002. The starch industry
produces the HFCS in Mexico. According SE officials, the total amount
assigned to meet the requirements of the starch industry in CY 2002 is
slightly lower than a year ago, which reflects more the Congressional
mandate of reducing the out‑of‑quota quantity of corn imported in CY2002
(see MX 2037 and MX 2126) rather than a decrease in the amount of corn
imported by the starch industry. It should be noted that even though
there has been no significant decrease in the amount of corn imported by
the starch industry, most of this is going for the production of other
starch products and not HFCS.

**Trade**

The import estimate for MY 2000/01 was revised upward to 6.319 MMT,
reflecting official trade data from the Secretariat of Economy (World
Trade Atlas). Similarly, the import estimate for MY 2001/02 has been
revised upward to 197,000 MT, based on World Trade Atlas data (3.768 MT
October‑July) and U.S. Exports Sales data for August and September.
Lower imports for MY 2000/01 were offset by increased production and
higher-than-expected beginning stocks. Some trade sources have indicated
that shipments of U.S. corn exports have been slowing during the last
weeks, which was confirmed by the Secretariat of Economy (SE) officials.
According to private sources, SE delayed the issue of import permits for
U.S. corn, due to some administrative requirements and because it has
allocated 2002 NAFTA out‑of‑quota import permits (\"cupos\") for yellow
corn on a case‑by‑case basis. Sources indicated, however, that the main
importers (i.e., Bachoco and Arancia) have already received their
\"cupos\" and that the import trend of U.S. corn should be back to
normal in the next few days. The import estimate for MY 2002/03 remains
unchanged.

The MY 2001/02 export estimate has been raised to 92,000 MT, reflecting
the most recent official information from the Secretariat of Economy
(World Trade Atlas). On June 27, 2002, ASERCA announced the rules of a
new support program on the \"Diario Oficial\" (Mexico's Federal
Register) to provide incentives for Mexican buyers to export white corn
produced in Sinaloa during the fall/winter 2001/02 crop cycle. The main
purpose of this program is to reduce the temporary oversupplies of white
corn in Sinaloa. As a result of this program, Mexico white corn exports
increased, official sources stated. The new program includes a flat rate
per ton payment of 274 pesos per hectare (US\$27/MT) that has been given
to buyers of Sinaloa's corn who decide to export this grain. The total
volume to be supported by the program is 200,000 MT. ASERCA is SAGARPA's
decentralized administrative body in charge of developing and
implementing Mexican domestic farm and agricultural trade policy.
Similarly, export estimates for MY 2002/03 have been revised upward to
100,000 MT, on the assumption that SAGARPA will implement a similar
program next year. The import estimate for MY 2000/01 has been revised
downward, based on Mexican official data.

**Stocks**

Estimated ending stocks for MY 2000/01 and MY 2001/02 have been
increased in response to increased production and imports. Also, the
ending stock estimate for MY 2002/03 was revised slightly upward.

  ---------------------- ------------- ----------- ------------- ----------- ---------- -----------
  **PSD Table**                                                                         

  **Country**            **Mexico**                                                     

  **Commodity**          **Sorghum**                             (1000                  
                                                                 HA)(1000               
                                                                 MT)                    

                         Revised       2000        Preliminary   2001        Forecast   2002

                         Old           New         Old           New         Old        New

  Market Year Begin      10/2000                   10/2001                   10/2002    

  Area Harvested         1825          1835        1960          1890        1950       1850

  Beginning Stocks       1281          1281        788           779         788        626

  Production             5665          5665        6500          5882        6850       5500

  TOTAL Mkt. Yr. Imports 4892          4883        4700          5165        4200       5400

  Oct‑Sep Imports        4892          4883        4700          5165        4200       5400

  Oct‑Sep Import U.S.    4862          4804        0             5123        0          5350

  TOTAL SUPPLY           11838         **11829**   11988         **11826**   11838      **11526**

  TOTAL Mkt. Yr. Exports 0             0           0             0           0          0

  Oct‑Sep Exports        0             0           0             0           0          0

  Feed Dom. Consumption  11050         11050       11200         11200       11200      11200

  TOTAL Dom. Consumption 11050         11050       11200         11200       11200      11200

  Ending Stocks          788           779         788           626         638        326

  TOTAL DISTRIBUTION     11838         **11829**   11988         **11826**   11838      **11526**
  ---------------------- ------------- ----------- ------------- ----------- ---------- -----------

**Production**

FAS/Mexico has lowered the production estimate for Mexico's total MY
2001/02 sorghum crop to 5.9 MMT, due to severe dry weather damage in
Tamaulipas, one of the country's most important sorghum areas (see MX
2069, MX 2090). Tamaulipas alone accounts for approximately 70 percent
of Mexico's spring/summer harvest. During the 2002 spring/summer
harvest, total losses reached more than 100,000 hectares, as yields
diminished due to lack of rainfall during the head-filling stage.
Consequently, production for this season was approximately 1.1 MMT, or
37 percent lower than a year ago. The spring/summer harvest normally
accounts for approximately 35 percent of total sorghum production, but
this year its share was reduced by at least 10 percent. Similarly,
FAS/Mexico has decreased the estimates for harvested area based on the
most recent data from the Secretariat of Agriculture, Livestock, Rural
Development, Fisheries and Foodstuffs (SAGARPA). Also, the MY 2002/03
production forecast was revised downward as a result a lower planted
area. SAGARPA and private industry surveys revealed that estimated
2002/03 fall/winter harvest production will be 3.5 MMT, which is lower
than initially estimated. Even though weather conditions have been
favorable in the main producing areas such as the Bajio region, the
total planted area was lower than originally expected. For 2002/03
fall/winter harvest, sorghum growers planted 1.0 million has., down from
the 1.142 million hectares initially estimated (see MX 2122).

###### 

###### 

###### Trade

The MY 2000/01 import estimate has been raised to 5.4 MMT, due to lower
than previously estimated domestic production and continued strong
demand from feed millers. Similarly, the import estimate for MY 2001/02
has been revised upward to 5.2 MMT. This increase reflects preliminary
final official data and the necessity to rebuild stocks. The import
estimate for MY 2000/01 has been revised slightly downward based on
Mexican official data.

**Stocks**

Estimated ending stocks for MY 2001/02 and MY 2002/03 have been lowered
in response to reduced production. Also, the ending stock estimate for
MY 2000/01 was revised slightly downward.