Required Report - public distribution

**Date:** 07/07/2005

**GAIN Report Number:** MX5056

MX0000

**Mexico**

Planting Seeds

**Annual Report**

2005

**Approved by:**

![](media/image1.wmf)Suzanne E. Heinen

#### U.S. Embassy Mexico City

**Prepared by:**

Sal Trejo

**Report Highlights:**

Mexico's planting seed imports in 2004 decreased 22 percent from the
previous year, to a total of \$423.4 million. The U.S. share of total
imports, as a leading supplier to Mexico, reached \$199.1 million, down
2.5 percent from the previous year in the dollar value. Mexican seed
exports, on the other hand, totaled \$105.5 million, up 10.5 percent
from the previous year, with export shipments to the U.S. market
accounting for almost \$27.7 million or 26.2 percent of the total export
dollar value.

Includes PSD Changes: No

Includes Trade Matrix: Yes

Annual Report

Mexico \[MX1\]

\[MX\]

Table of Contents

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# Executive Summary\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....3

# Production\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...3

# Trade\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....3

# Policy\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....4

# Marketing\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....4

Statistical
Tables\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....6

# Executive Summary

Mexican planting seed imports in CY 2004 totaled \$ 423.4 million, down
from \$546.7 million the previous year. The U.S. share as a leading seed
exporter to Mexico was 47 percent of the total dollar volume, supplying
\$ 199.1 million worth of seeds to Mexico. Similar to the decrease of
Mexican imports from the world, the U.S. share of imports in CY 2004
also decreased 2.5 percent from the previous year in dollar value.
Mexican seed exports, on the other hand, grew 10.5 percent from the
previous year to \$ 105.5 million in CY 2004, of which the U.S. share of
Mexico's export market was 26.2 percent or \$ 27.7 million in dollar
value.

# 

# Production

With Mexico's domestic farm sector showing continuing signs of
stagnation in crop production, the focus of Mexican seed trade business
continues to be placed on export marketing and international operations.
In addition, climatic conditions throughout Mexico's northern farming
regions tend to impact planting seed demand from farmers, especially
those from areas that have traditionally been planted to vegetables and
other water intensive crops. Recently some farmers have changed over to
crops requiring less irrigation. For example, some acreage in the states
of Chihuahua, Sonora and Coahuila are now dedicated to plantings of tree
nuts, specifically pecans, which require less water and are very
productive with the prevailant dry weather of these states.

Statistical information for domestic production of seeds is not
available. The Mexican seed industry is made up of individual farmers,
large multinational companies, national private seed companies, national
public research and seed production organizations such as INIFAP, and
international agricultural research centers such as CIMMYT (The
International Maize and Wheat Improvement Center). Additionally, private
companies can participate in any phase of the seed industry from seed
production and conditioning to seed marketing and distribution.

#### Trade

## 

## Imports

# 

# Mexican planting seed imports totaled \$423.4 million in CY 2004, down from \$546.7 million the previous year principally due to insufficient water for irrigation causing limited demand for some seed varieties and the availability of domestically produced planting seeds that were utilized at the expense of higher priced imports. In quantity, imports dropped by 27.2 percent from 771.5 TMT in CY 2003 to 561.9 TMT in CY 2004. Except for an insignificant increase in Mexican imports of the catchall 'other' seeds category in CY 2004, imports of all other seed categories; field crop seeds, grass seeds, leguminous seeds, 'other forage' seeds, and 'other vegetable' seeds, dropped across the board. 

# 

# Overall, Mexican imports from the U.S. in CY 2004 decreased 2.5 percent in dollar value and dropped almost 22 percent in quantity from the previous year due to the higher cost of imported seeds and the increase in use of domestically produced planting seeds. Except for the field crop seeds (corn, rape or colza), where Mexican imports from the U.S. grew by 41.1 percent in CY 2004, the quantity of U.S. planting seeds exports dropped in every other category. Grass seed imports decreased 12.5 percent, leguminous seed imports decreased 42.6 percent, 'other forage' seed imports decreased 13.1 percent, 'other' seed imports decreased 2.3 percent, and 'other vegetable' seed imports decreased 7.1 percent from the previous year. 

Exports

-   Mexican seed exports in 2004 totaled \$105.5 million in value, up
    10.5 percent from the previous year, with the export value in excess
    of the previous year in all of the key seed categories with the
    exception of grass seeds and 'other forage' seeds. Mexican total
    export quantity in 2004 was down 39.4 percent from the previous year
    to 92.6 TMT tons due to increased use of domestically produced seeds
    that are more competitively priced than imports.

Mexican export shipments to the U.S in 2004 totaled \$ 27.7 million in
value, down 12 percent in value from the previous year and accounted for
26.2 percent of the Mexican total seed exports. Other vegetable seeds
and leguminous seeds led Mexican exports to the United States.

# Policy

Mexico's agricultural sector continues to experience extraordinary
adjustment problems as the government continues to move away from import
substitution and self-sufficiency policies to a market oriented,
competitively structured industry. High interest rates for agricultural
loans have compounded the difficulty for producers.

A recently proposed bill concerning planting seeds (LAW FOR PROTECTING
AND DEVELOPING SEEDS) was submitted for approval to the Agricultural
Committee in the Mexican Congress who then voted and approved the
proposed law on April 28, 2005. Thereafter the proposed seed law was
sent to the Mexican Senate where it currently awaits further review
and/or approval. In its present form, the bill is calling for the
establishment of a governmental company to control seed production in
Mexico. Furthermore, the proposed law may have an impact on the use of
imported and/or domestically produced planting seeds. However, there
apparently is Mexican domestic opposition to the legislation for a
variety of reasons, including the infringement on the Copy Rights or
patents of imported seed, the possible harm it could do to Mexican
imports and exports of planting seeds, the likelihood of an increase in
costs to the producers and consumers, and the technical challenges of
implementing and complying with the legislation.

Mexican phytosanitary regulations on seed imports do not constitute a
significant impediment to the seed trade with Mexico. Mexico subscribes
to the International Convention on the Protection of New Plant Varieties
and newly registered seed varieties are protected under Mexico's Federal
Plant Variety Law.

#### Marketing

Most seeds are imported and distributed by the large Mexican seed
companies, a number of which are U.S. owned. The seed companies in turn
sell to dealers throughout the country and these, in turn, sell to the
farmers. A small percentage of these seeds, about 5 percent, are sold at
retail through supermarkets and garden supply outlets. In contrast,
about half of all flower seeds move through these retailers. Retailers,
even the large supermarkets, buy very little direct. They prefer to buy
instead from the Mexican seed companies, or if the volume is small, from
local dealers.

The U.S. has long supplied the Mexican market with seeds, capturing a 47
percent market of total import requirements by value. Canada is another
of the main supplier of plantings seeds to Mexico, with a 71 percent
share of the import market in field crop seeds, and a 39.7 percent share
of leguminous seeds trade. Brazil, Netherlands, Israel and China are
lesser but regular suppliers of planting seeds to Mexico.

U.S. planting seed exporters, new to the Mexican market, are also
encouraged to contact the following trade organizations for further
market information.

+-----------------------------------------------------------------------+
| ######## TRADE ORGANIZATIONS                                          |
+-----------------------------------------------------------------------+
| THE U.S. AGRICULTURAL TRADE OFFICE (ATO)                              |
|                                                                       |
| BRUCE ZANIN, DIRECTOR                                                 |
|                                                                       |
| JAIME BALMES NO. 8 - 2^ND^. FLOOR                                     |
|                                                                       |
| 11510 MEXICO, D.F.                                                    |
|                                                                       |
| PH. (525) 280-5291/5276; FAX. (525) 281-6093                          |
+-----------------------------------------------------------------------+
| MEXICAN ASSOCIATION OF SEED TRADERS (AMSAC)                           |
|                                                                       |
| OLGA CECILIA TREVINO DE LA GARZA                                      |
|                                                                       |
| PRESIDENT                                                             |
|                                                                       |
| AV. NUEVO LEON #209 -- 601 AND 602                                    |
|                                                                       |
| COL. HIPODROMO CONDESA                                                |
|                                                                       |
| MEXICO, D.F.                                                          |
|                                                                       |
| PH. (525) 5516-0293; FAX. (525) 5272-1775                             |
+-----------------------------------------------------------------------+
| NATIONAL INSTITUTE OF FORESTRY, AGRICULTURE AND LIVESTOCK             |
| INVESTIGATIONS (INIFAP)                                               |
|                                                                       |
| SERAPIO RENDON \# 83                                                  |
|                                                                       |
| COL. SAN RAFAEL                                                       |
|                                                                       |
| MEXICO, D.F.                                                          |
|                                                                       |
| CONTACT: JOSE DE JESUS MOLINA                                         |
|                                                                       |
| PH. (525) 5140-1616; FAX. (525) 5546-1150                             |
+-----------------------------------------------------------------------+
| NATIONAL SERVICE INSPECTION AND CERTIFICATION OF SEEDS (SNICS)        |
|                                                                       |
| AV. PRESIDENTE JUAREZ #13                                             |
|                                                                       |
| COL. EL CORTIJO                                                       |
|                                                                       |
| TLALNEPANTLA, ESTADO DE MEXICO                                        |
|                                                                       |
| CONTACT: ENRIQUETA MOLINA MACIAS                                      |
|                                                                       |
| www.sagarpa.gob.mx/Snics                                              |
+-----------------------------------------------------------------------+

#### Tables

  ------------- -------------- ---------------- -------------- ------------
  MEXICAN TOTAL                                                
  SEED IMPORTS                                                 

  Seed Group    Quantity                        Value (US \$   
                (Metric Tons)                   000)           

                2003           2004             2003           2004

  Field Crop    611,810        436,121          199,834        179,225
  Seeds                                                        

  Grass Seeds   33,725         29,872           37,144         34,858

  Leguminous    88,948         63,114           41,653         33,812
  Seeds                                                        

  Other Forage  35,796         31,714           46,747         45,013
  Seeds                                                        

  Other Seeds   58             66               13,894         15,448

  Other         1,188          1,036            102,813        115,079
  Vegetable                                                    
  Seeds                                                        

  Total         771,525        561,923          546,655        423,435
  ------------- -------------- ---------------- -------------- ------------

(Source: World Trade Atlas, Mexico Edition, January 2005)

  ------------- -------------- -------------- -------------- --------------
  MEXICAN SEED                                               
  IMPORTS FROM                                               
  THE UNITED                                                 
  STATES                                                     

  Seed Group    Quantity                      Value (\$000)  
                (Metric Tons)                                

                2003           2004           2003           2004

  Field Crop    8,222          11,603         26,559         37,122
  Seeds                                                      

  Grass Seeds   32,314         28,290         31,415         28,824

  Leguminous    54,782         31,435         27,735         20,208
  Seeds                                                      

  Other Forage  34,157         29,677         40,159         37,115
  Seeds                                                      

  Other Seeds   43             42             10,960         12,408

  Other         978            909            67,431         63,388
  Vegetable                                                  
  Seeds                                                      

  Total         130,496        101,956        204,259        199,065
  ------------- -------------- -------------- -------------- --------------

(Source: World Trade Atlas, Mexico Edition, January 2005)

  ------------- -------------- -------------- -------------- --------------
  FIELD CROP                                                 
  SEEDS                                                      

  Imports From: 2003                          2004           

                Value (\$000)  \% Share       Value (\$000)  \% Share

  The World     199,834        100.0          179,225        100.0

  U.S.A.        26,559         13.3           37,122         20.7

  Canada        169,966        85.0           127,167        71.0

  Others        3,309          1.7            14,936         8.3
  ------------- -------------- -------------- -------------- --------------

(Source: World Trade Atlas, Mexico Edition, January 2005)

  ------------- -------------- -------------- -------------- --------------
  GRASS SEEDS                                                

  Imports From: 2003                          2004           

                Value (\$000)  \% Share       Value (\$000)  \% Share

  The World     37,144         100.0          34,858         100.0

  U.S.A.        31,415         84.6           28,824         82.7

  Others        5,729          15.4           6,034          17.3
  ------------- -------------- -------------- -------------- --------------

(Source: World Trade Atlas, Mexico Edition, January 2005)

  ------------- -------------- -------------- -------------- --------------
  LEGUMINOUS                                                 
  SEEDS                                                      

  Imports From: 2003                          2004           

                Value (\$000)  \% Share       Value (\$000)  \% Share

  The World     41,653         100.0          33,812         100.0

  U.S.A.        27,735         66.6           20,208         59.8

  Canada        13,565         32.6           13,419         39.7

  Others        353            0.8            185            0.5
  ------------- -------------- -------------- -------------- --------------

(Source: World Trade Atlas, Mexico Edition, January 2005)

  ------------- -------------- -------------- -------------- --------------
  OTHER FORAGE                                               
  SEEDS                                                      

  Imports From: 2003                          2004           

                Value (\$000)  \% Share       Value (\$000)  \% Share

  The World     46,747         100.0          45,013         100.0

  U.S.A.        40,159         85.9           37,115         82.5

  Brazil        5,663          12.1           5,901          13.1

  Others        925            2.0            1,997          4.4
  ------------- -------------- -------------- -------------- --------------

(Source: World Trade Atlas, Mexico Edition, January 2005)

  ------------- -------------- -------------- -------------- --------------
  OTHER SEEDS                                                

  Imports From: 2003                          2004           

                Value (\$000)  \% Share       Value (\$000)  \% Share

  The World     13,894         100.0          15,448         100.0

  U.S.A.        10,960         78.9           12,408         80.3

  Others        2,934          21.1           3,040          19.7
  ------------- -------------- -------------- -------------- --------------

(Source: World Trade Atlas, Mexico Edition, January 2005)

  ------------- -------------- -------------- -------------- --------------
  OTHER                                                      
  VEGETABLE                                                  
  SEEDS                                                      

  Imports From: 2003                          2004           

                Value (\$000)  \% Share       Value (\$000)  \% Share

  The World     102,813        100.0          115,079        100.0

  U.S.A.        67,431         65.6           63,388         55.1

  Netherlands   10,679         10.4           19,022         16.5

  Israel        6,807          6.6            7,323          6.4

  China         5,985          5.8            9,309          8.1

  Others        11,911         11.6           16,037         13.9
  ------------- -------------- -------------- -------------- --------------

(Source: World Trade Atlas, Mexico Edition, January 2005)

  ------------- -------------- ---------------- -------------- ------------
  MEXICAN TOTAL                                                
  SEED EXPORTS                                                 
  TO THE WORLD                                                 

  Seed Group    Quantity                        Value (US \$   
                (Metric Tons)                   000)           

                2003           2004             2003           2004

  Field Crop    4,841          5,703            4,921          6,819
  Seeds                                                        

  Grass Seeds   847            490              1,569          977

  Leguminous    145,663        85,124           80,023         81,344
  Seeds                                                        

  Other Forage  873            478              1,631          1,010
  Seeds                                                        

  Other Seeds   282            184              2,417          3,221

  Other         271            609              4,991          12,175
  Vegetable                                                    
  Seeds                                                        

  Total         152,777        92,588           95,552         105,546
  ------------- -------------- ---------------- -------------- ------------

(Source: World Trade Atlas, Mexico Edition, January 2005)

  ------------- -------------- ---------------- -------------- ------------
  MEXICAN TOTAL                                                
  SEED EXPORTS                                                 
  TO THE UNITED                                                
  STATES                                                       

  Seed Group    Quantity                        Value (US \$   
                (Metric Tons)                   000)           

                2003           2004             2003           2004

  Field Crop    1,672          1,071            777            391
  Seeds                                                        

  Grass Seeds   770            377              1,167          698

  Leguminous    38,714         13,408           21,493         10,969
  Seeds                                                        

  Other Forage  798            389              1,248          731
  Seeds                                                        

  Other Seeds   207            125              1,852          2,801

  Other         254            504              4,868          12,075
  Vegetable                                                    
  Seeds                                                        

  Total         42,415         15,874           31,405         27,665
  ------------- -------------- ---------------- -------------- ------------

(Source: World Trade Atlas, Mexico Edition, January 2005)