Required Report - public distribution

**Date:** 13/08/2004

**GAIN Report Number:** MX4102

MX4102

**Mexico**

Tree Nuts

**Annual Report**

2004

**Approved by:**

![](media/image1.wmf)Lisa Anderson

#### U.S. Embassy Mexico City

**Prepared by:**

Sal Trejo/Marco Arceo

**Report Highlights:**

Mexico's MY 2005/06 pecan crop is forecast at 68,000 MT, 3.0 percent
higher than the previous year's revised level, as more new trees begin
bearing nuts and are expected to boost harvest prospects. For MY
2004/05, production has been revised upward by 3.0 percent, due to ideal
weather conditions (sunlight and temperatures) in the pecan orchards and
farmers applying quality inputs to improve volume and nut quality.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Mexico \[MX1\]

\[MX\]

Table of Contents

[**Executive Summary** 3](#executive-summary)

[**Production** 3](#production)

[**Consumption** 3](#consumption)

[**Trade** 3](#trade)

[**Stocks** 4](#stocks)

[**Policy** 4](#policy)

[**Marketing** 4](#marketing)

PS&D
Table..................................................................................................................................................
6

#### Trade Matrix .................................................................................................................................................7

# Executive Summary

Mexican pecan production continues to increase as trees planted over the
last several years come into bearing. Growers continue to increase area
planted to pecans as this fits into Mexico's need to diversify into less
water-intensive crops. In addition, Mexico's pecan producing regions are
unique for producing pecans of the highest quality due to exceptional
weather and sunlight hours needed for pecans. With the increased acreage
planted to pecans, production should become more efficient, diversified,
and profitable for growers who are able to increase tree planting
density.

Mexico normally follows the growing trends of the United States and many
consumers believe that nuts are a health food that provides specific
health benefits. As disposable incomes for some Mexican consumers and
awareness of U.S. trends increase, many consumers are purchasing pecans
as a snack food. Retailers are currently marketing pecans mixed with
other tree nuts as a snack food where the product can command a premium
price. Consumption of pecans in the processed food, bakery and
confectionary industries continues to grow as well.

NOTE: PS&D import and export figures are based on official Mexican trade
data and information from domestic traders, and frequently differ from
official U.S. trade data.

# Production

An expected return to more normal weather conditions combined with a
steady increase in plantings and improved inputs is expected to produce
better than average sized crops in the coming years. Much for the above
reason, Mexico's pecan production for MY2005/06 is forecast at 68,000 MT
in-shell basis, up 3.0 percent, from the previous year's estimate.
According to industry sources, revised production estimates for
MY2004/05 place the crop at 66,000 MT, due to better tree care and
improved inputs. For MY 2003/04, production estimate was revised
downward reflecting official data.

# Consumption

Domestic consumption figures are not available for pecans in Mexico. The
consumption figures indicated in the PS&D table of this report represent
industry's calculation of the difference between production, exports and
domestic disappearance. For the above reason, consumption for MY 2005/06
is forecast at 37,500 MT, 4.8 percent over the previous year's revised
estimate. MY 2004/05 consumption is estimated at 35,785 MT, an increase
of 10 percent above the previous estimate, due to the larger crop. For
MY 2003/04, consumption is revised downward by 6.5 percent over our
previous estimate for the same period due to lower production that
resulted in a domestic price increase of around US\$2.33/kg.

# Trade

Exports for MY2005/06 are forecast to reach 46,500 MT, a
less-than-one-percent increase over the previous year's revised figure,
due to the slight increase in area planted and production and the
expected demand for high quality pecans in the U.S. market. Exports for
MY 2004/05 are revised downward from our previous estimate for the same
period as producers felt domestic prices were attractive enough to sell
more pecans in the domestic market rather than export larger quantities.
For MY 2003/04, exports were revised downward due to a drop in
production fueled by dry conditions that reduced yield potential in the
lead up to harvest.

# 

U.S. pecan imports have been declining lately. Inquiries into this have
revealed that an unknown amount are temporary imports of inshell pecans
to the Mexican border area for shelling by shelling plants located on
the Mexican side of the border and then re-exported to the United
States. MY 2005/06 imports are forecast at 16,000 metric tons, the same
as the previous year's revised figure, due to rising domestic
production. Imports for MY 2004/05 are revised downward from the
previous estimate of the same period, due to increased domestic
production and attractive domestic prices. Import figures for MY 2003/04
are revised downward reflecting official data.

#### Stocks

According to industry sources, insufficient cold storage warehouses for
storing pecans throughout the year is the principal reason for the lack
of pecan stocks at the end of the marketing year. In addition, both good
domestic and export market demand and attractive prices have acted to
clear the market of stocks.

# Policy

There are no new federal or state government policies encouraging tree
nut production of which post is aware.

# Marketing

U.S. tree nut exporters, new to the Mexican market, are encouraged to
contact the following trade organizations for further market
information.

+-----------------------------------------------------------------------+
| THE U.S. AGRICULTURAL TRADE OFFICE                                    |
|                                                                       |
| BRUCE ZANIN, DIRECTOR                                                 |
|                                                                       |
| JAIME BALMES NO. 8 - 2^ND^. FLOOR                                     |
|                                                                       |
| 11510 MEXICO, D.F.                                                    |
|                                                                       |
| PH. (525) 280-5291/5276; FAX. (525) 281-6093                          |
|                                                                       |
| <ZANINB@fas.usda.gov>                                                 |
+-----------------------------------------------------------------------+
| ASOCIACION NACIONAL DE FABRICANTES DE CHOCOLATES, DULCES Y SIMILARES, |
| A.C.                                                                  |
|                                                                       |
| (NATIONAL ASSOCIATION OF MANUFACTURERS OF CHOCOLATES, CANDY AND       |
| SIMILARS)                                                             |
|                                                                       |
| MANUEL MARIA CONTRERAS NO. 133-301                                    |
|                                                                       |
| COL. CUAUHTEMOC                                                       |
|                                                                       |
| MEXICO 06500, D.F.                                                    |
|                                                                       |
| PH. (525) 5546-1259, 5546-0974; FAX. (525) 5592-2497                  |
+-----------------------------------------------------------------------+
| CAMARA NACIONAL DE INDUSTRIA PANIFICADORA Y SIMILARES (CANAINPA)      |
|                                                                       |
| (NATIONAL CHAMBER OF THE BAKING AND CONFECTIONARY INDUSTRY)           |
|                                                                       |
| DR. LICEAGA NO. 96                                                    |
|                                                                       |
| COL. DOCTORES                                                         |
|                                                                       |
| MEXICO 06720, D.F.                                                    |
|                                                                       |
| PH. (525) 5578-9277, 5578-9288; FAX. (525) 5761-8924                  |
+-----------------------------------------------------------------------+
| CAMARA NACIONAL DE LA INDUSTRIA DE TRANSFORMACION (CANACINTRA)        |
|                                                                       |
| (NATIONAL CHAMBER OF THE TRANSFORMATION INDUSTRY)                     |
|                                                                       |
| SAN ANTONIO NO. 256                                                   |
|                                                                       |
| COL. AMPLIACION NAPOLES                                               |
|                                                                       |
| MEXICO 03849, D.F.                                                    |
|                                                                       |
| PH. (525) 5563-3400, 5563-3000; FAX. (525) 5598-9467                  |
+-----------------------------------------------------------------------+
| ASOCIACION NACIONAL DE TIENDAS DE AUTOSERVICIO Y DEPARTAMENTALES,     |
| A.C. (ANTAD)                                                          |
|                                                                       |
| (NATIONAL ASSOCIATION OF SUPERMARKETS AND DEPARTMENT STORES)          |
|                                                                       |
| AV. HORACIO 1855, 6TH FLOOR                                           |
|                                                                       |
| COL. CHAPULTEPEC MORALES                                              |
|                                                                       |
| 11570 MEXICO, D.F.                                                    |
|                                                                       |
| \(525\) 5580-1772; FAX. (525) 5395-2610                               |
+-----------------------------------------------------------------------+

**Tables**

**PS&D, Pecans, In-shell Basis**

(Hectares, Metric Tons, Trees)

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

  **Country:**              **Mexico**                                               

  **Commodity:**            **Pecans,                                                
                            In-shell                                                 
                            Basis**                                                  

                            **2003**               **2004**              **2005**    

                            Old          New       Old         New       Old         New

  Market Year Begin         **10/03**              **10/04**             **10/05**   

  Area Planted              53500        53745     54000       56165                 56500

  Area Harvested            52000        52000     53000       53545                 55000

  Bearing Trees             3100000      3100000   3150000     3250000               3300000

  Non-Bearing Trees         125000       125000    130000      140000                140000

  Total Trees               3225000      3225000   3280000     3390000               3440000

  Beginning Stocks          0            0         0           0                     0

  Production                63500        62435     64000       66000                 68000

  Imports                   17100        10000     18000       16000                 16000

  TOTAL SUPPLY              80600        72435     82000       82000                 84000

  Exports                   48600        42398     49500       46215                 46500

  Domestic Consumption      32000        30037     32500       35785                 37500

  Ending Stocks             0            0         0           0                     0

  TOTAL DISTRIBUTION        80600        72435     82000       82000                 84000
  ------------------------- ------------ --------- ----------- --------- ----------- ---------

Note: Conversion factor used from shelled to in-shell basis, 2.00

**Trade Matrix**

  -------------------- ----------- ---------- -------------- ---------- ----------
  [Pecans, In                                 UNITS: Metric             
  shell]{.smallcaps}                          Tons                      

  Exports To:          2003        2004\*     Imports From:  2003       2004\*

  U.S.                 23513       4253       U.S.           8315       8000

  Others unlisted      5           2          Others         0          0
                                              unlisted                  

  Grand Total          23518       4255       Grand Total    8315       8000
  -------------------- ----------- ---------- -------------- ---------- ----------

  ---------------------- ---------- ---------- -------------- ---------- ----------
  [Pecans,                                     UNITS: Metric             
  Shelled]{.smallcaps}                         Tons                      

  Exports To:            2003       2004\*     Imports From:  2003       2004\*

  U.S.                   9442       3618       U.S.           675        22

  Others not listed      0          0          Others not     0          0
                                               listed                    

  Grand Total            9442       3618       Grand Total    675        22
  ---------------------- ---------- ---------- -------------- ---------- ----------

SOURCE: US Trade Data from U.S. Customs

NOTE: \* indicates that figures are for January thru May.