Voluntary Report - public distribution

**Date:** 10/27/2006

**GAIN Report Number:** MX6091

MX6017

**Mexico**

**Agricultural Situation**

**Weekly Highlights and Hot Bites #41**

**2006**

**Approved by:**

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

U.S. Embassy

**Prepared by:**

Dulce Flores, Gabriel Hernandez, Benjamin Juarez and Jeff Nawn

**Report Highlights:**

-   **CALDERON VISITS CANADA TO TALK ABOUT TRADE**

-   **MEXICO: POTENTIAL MARKET FOR CRANBERRY PRODUCTS**

-   **MEXICO ATTENDED THE 2006 PMA FRESH SUMMIT**

-   **NEW PRODUCT FOR THE DOMESTIC MARKET: LIQUID EGGS**

-   **MEXICO STILL UNABLE TO EXPORT POULTRY MEAT TO THE U.S.**

-   **EXPERTS FAIL TO SEE ETHANOL'S ROLE IN MEXICO**

-   **FARMERS DEMAND EXCLUSION OF CORN FROM THE NORTH AMERICA FREE TRADE
    AGREEMENT**

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Mexico \[MX1\]

\[MX\]

**CALDERON VISITS CANADA TO TALK ABOUT TRADE**

Canadian Prime Minister Stephen Harper praised his Mexican counterpart,
President-elect Felipe Calderon, during a two-day visit to Ottawa.
\"(Calderon) is a principled man with a political and economic vision
for Mexico that is grounded in realism,\" Harper said during a news
conference before the two North American leaders began a working lunch.
The trip to Canada was Calderon's first outside Latin America as
president-elect. Ironically, the visit began on the same day that U.S.
President George W. Bush signed legislation approving the construction
of a 700-mile (1,125 kilometers) fence on the U.S. -- Mexican border.
Calderon said the United States was making \"a grave mistake\" and
compared the fence proposal to the Berlin Wall. Harper offered cautious
support to Calderon's criticism of the U.S. border wall, saying his
government has presented its own arguments against the construction of
physical barriers. Canada has also complained to the U.S. government
about a new U.S. law that will require Canadians to carry passports when
crossing into the United States. A similar law for people traveling from
Mexico goes into effect in January. Besides addressing disagreements
with their shared neighbor, Calderon and Harper discussed how to convert
the Mexico-Canada Competitiveness Alliance into a tool to strengthen
their bilateral relationship. Bilateral trade and mechanisms to improve
the North American Free Trade Agreement were also high on the agenda.
Calderon flew to Ottawa on Wednesday night. On Thursday, in addition to
meeting with Harper, the president-elect met with opposition party
leaders from the Canadian Parliament. On Friday, Calderon met with
forestry and environmental experts, business leaders, and leaders of
Parliament. (Source: El Universal; 10/27/2008)

###### MEXICO: POTENTIAL MARKET FOR CRANBERRY PRODUCTS

According to a local press report, Ocean Spray is consolidating their
marketing efforts in Mexico. Ocean Spray, which commercializes products
manufactured from cranberries, is investigating the market possibilities
for distributing concentrated cranberry juice. The company's
representative in Mexico also indicated that they expect that cranberry
juice mixed with apple or grape juice will become popular among younger
consumers. (Source: Financiero 10/26/06)

###### MEXICO ATTENDED THE 2006 PMA FRESH SUMMIT

Mexican Undersecretary of Agriculture, Francisco Lopez Tostado, and the
General Coordinator for ASERCA, Blanca G. Villarello, opened the MexBest
Pavillion at the 2006 PMA Fresh Fruit Summit in San Diego last week. On
hand were 110 Mexican companies and Mexican agricultural producer
associations. SAGARPA officials report that Mexican producers will
realize about \$12 billion in agricultural and fisheries exports during
2006. Among the most important products exhibited in the MexBest
pavilion were: avocadoes, grapefruits, persian and key limes, bell
peppers, hot peppers, sauces, several varieties of bananas, several
varieties of tomatoes, onions, coriander, zucchini, cauliflower, and
carrots. (Source: SAGARPA bulletin No. 268/06 10/22/06)

###### NEW PRODUCT FOR THE DOMESTIC MARKET: LIQUID EGGS

Mexican agribusiness firm, Avibel, has announced the launch of a new
product line, liquid eggs. Avibel president, Cesar de Anda, indicated
that liquid egg products are already popular in the U.S. and Europe, and
his firm is responding to market demand in Mexico. Liquid eggs come in
half-liter and one-liter tetrapak packages, and will be marketed to
health-conscious middle-income consumers. De Anda indicated that this
product line is intended only for domestic consumption and not for
export purposes. The firm projected that by 2007 Avibel liquid egg
production will be about 100,000 eggs per day. (Source: Reforma
10/24/06)

MEXICO STILL UNABLE TO EXPORT POULTRY MEAT TO THE U.S.

When the NAFTA was signed in 1993 the Mexican poultry industry expected
that the trade agreement would make available to them a large and
lucrative market for Mexican poultry exports. However, those hopes have
been dashed, and the long process of validating the sanitary integrity
of the Mexican poultry slaughter operations has prevented Mexico from
taken advantage of the U.S. market. Sergio Chavez, Director of the
Mexican Poultry Association, affirmed that as long as Mexico does not
have the opportunity to export, the promised gains from the free trade
agreement cannot be realized. Although one plant is very close to being
approved for export, it is still not clear when the entire country will
be able to export poultry meat to the U.S. and other important markets.
(Source: Financiero 10/23/06)

**EXPERTS FAIL TO SEE ETHANOL'S ROLE IN MEXICO**

Francisco Mere, General Director of Agriculture Trusteeships of the
Mexican Central Bank, stated that even if Mexico passes a law mandating
ethanol additives in gasoline, there is not enough sugar can or corn
available in the country to produce it in sufficient volumes. \"Let us
give a very clear example: If the cars of Monterrey, Guadalajara, and
Mexico City are required to use 10 percent sugar cane ethanol in their
fuel, it would mean that the entire Mexican sugar crop would be
dedicated to ethanol production," Mere stated. He emphasized that the
use of sugar cane and corn ethanol is an attractive sector in the United
States, however, Mexico does not have the same resource base as the
U.S., thus it is not as viable an option here. (Source: Reforma;
10/21/2006)

**FARMERS DEMAND EXCLUSION OF CORN FROM THE NORTH AMERICA FREE TRADE
AGREEMENT**

Upon conclusion of the national meeting of corn producer organizations,
farm leaders made a strong declaration in defense of corn, and the
importance of food sovereignty in Mexico. The declaration states that
starting on the first day of 2007, the new administration will face a,
"...growing movement within the rural sector in opposition to the NAFTA
agriculture chapter.\" As a first step, the rural organizations are
getting organized and will present a unified front in order to pressure
the Mexican Congress \"to end its passivity\" towards the Mexican
federal government's policies, which are aimed at dismantling \"domestic
corn production capacity" and which \"condemn\" Mexico to food
dependency. (Source: La Jornada; 10/21/2006)

**REPORTS RECENTLY SUBMITTED BY FAS/MEXICO CITY**

+----------+-----------------------------------------------+----------+
| # NUMBER | # TITLE                                       | # DATE   |
+----------+-----------------------------------------------+----------+
| MX6088   | Trade Policy Monitoring Report                | 10/24/06 |
+----------+-----------------------------------------------+----------+
| MX6087   | Weekly Highlights and Hot Bites #40           | 10/20/06 |
+----------+-----------------------------------------------+----------+
| MX6086   | Mexico Announces the Sugar & Sugar Syrup TRQ  | 10/16/06 |
|          | for MY 2005-2007                              |          |
+----------+-----------------------------------------------+----------+
| MX6085   | Sugar Semiannual                              | 10/16/06 |
+----------+-----------------------------------------------+----------+
| MX6084   | Weekly Highlights and Hot Bites #39           | 10/13/06 |
+----------+-----------------------------------------------+----------+
| MX6083   | Weekly Highlights and Hot Bites #38           | 10/2/06  |
+----------+-----------------------------------------------+----------+
| MX6082   | Weekly Highlights and Hot Bites #37           | 9/25/06  |
+----------+-----------------------------------------------+----------+