Market Overview – Mexico

Production

Corn is by far the most important crop produced in Mexico, with production close to double in size of all other crops produced and grew 4.7% annually over 2013-2017.

Among the top ten crops, soybean meal saw the most significant increase over 2013-2017, growing by 6.9% annually. Production of oranges decreased 82.2%, with sorghum falling 14.5% annually over the same period.

Chicken is the most popular meat in Mexico, representing 51.6% of meat produced and 91.5% of livestock raised in the country.

Trade

Mexico is a net exporter of agri-food and seafood products. In 2017, Mexico's agri-food and seafood trade surplus was Can$7.6 billion with imports valued at Can$35.0 billion, and Can$42.6 billion in exports. Mexico's agri-food and seafood imports have been falling by an average rate of 0.25% over the last three years.

Mexico's top agri-food and seafood imports in 2017 were corn, soybeans, pork, poultry and wheat. Key supplying countries were the United States (U.S.), Brazil, Canada, Argentina, and Paraguay. Canada was Mexico's 2nd largest supplier of total agri-food and seafood products in 2017, with a 6.9% market share.

Mexico's processed food and beverage imports were valued at Can$19.9 billion in 2017, with Canada accounting for 4.5% of that total. The U.S., Canada, Spain, Chile, and New Zealand were the largest suppliers of processed food to Mexico in 2017, accounting for 81.2% of the market. Mexico's processed food imports increased by a CAGR of 5.7% between 2013 and 2017.

Canada's agri-food and seafood exports to Mexico were valued at Can$1.9 billion in 2017. Top exports were canola, wheat, malt, beef, and canola oil. In 2017, Canada registered an agri-food and seafood trade deficit of Can$0.8 billion with Mexico (Canada imported Can$2.7 billion worth of agri-food and seafood from Mexico in 2017).

Retail sales

Mexico is the second largest consumer market in Latin America, after Brazil. Retail sales of packaged food products grew 6.8% over 2014-2018, a trend that is expected to continue over the 2019-2023 period.

Savoury snacks and processed meat and seafood are expected to see the largest growth in sales over the 2019-2023 forecast period. Growth in this category is linked to rising demand for convenient foods, with consumer lifestyles becoming increasingly busy and affluent.

However, as Mexico grapples with one of the world's highest obesity rates people between ages 15 to 74, as well as one of the highest diabetes rates among OECD countries, consumers are being encouraged to address these health concerns by eating better. Food manufacturers are seeking to address these health concerns, as well as increasing costs and price sensitivity, by providing healthier food options in smaller packages. For example, offering packaged food with higher nutritional content, such as products including superfood seeds and grains such as quinoa, amaranth, buckwheat and flaxseed. Products with superfood grains include bread, pastries, biscuits, breakfast cereals, savoury snacks and chocolate confectionery.

Health and wellness food products

The health and wellness sector grew by a CAGR of 6.9% from 2014 to 2018 and is expected to grow by a CAGR of 7.1% over the 2019-2023 period. This trend is reflected in the country's growing middle class, which is demanding convenient and healthy food and is willing to pay the higher price for it.

Naturally healthy and free from food products showed the largest growth in the 2014-2018 period. Free from and organic products are expected to lead the way in terms of growth over 2019-2023.

Opportunities for Canada

On December 30, 2018, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) entered into force between Canada, Mexico and the other four Parties that triggered the entry into force of the Agreement (Japan, Singapore, Australia, New Zealand). Although most Canadian agriculture agri-food exports currently benefit from duty free access to Mexico under the North American Free Trade Agreement (NAFTA) (expected to be maintained under the new Canada-U.S.-Mexico Agreement (CUSMA)), the CPTPP could open modest, new commercial opportunities in Mexico for some Canadian dairy and poultry products that were excluded from tariff elimination commitments under NAFTA. Under the CPTPP, Mexico has established new tariff rate quotas (TRQs) with duty-free access (within specified volumes) for imports of cheese, butter, evaporated milk, condensed milk and dairy-based preparations, and skim milk powder, among other dairy products, from CPTPP member countries (including Canada). The corresponding Harmonized System (HS) codes are:

• Milk and cream, not concentrated or containing added sugar or other sweetening matter (HS Codes: 0401.10.01, 0401.10.99, 0401.20.01, 0401.20.99, 0401.40.01, 0401.40.99, 0401.50.01, 0401.50.99)
• Skim milk powder (HS Codes: 0402.10.01 and 0402.21.01)
• Evaporated Milk (HS Codes: 0402.91.01 and 0402.91.99)
• Condensed Milk (HS Codes: 0402.99.01 and 0402.99.99)
• Butter (HS Codes: 0405.10 and 0405.20)
• Cheese (HS Codes: 0406.10.01, 0406.20.01, 0406.30.01, 0406.30.99, 0406.90.03, 0406.90.04, 0406.90.05, 0406.90.06 and 0406.90.99)
• Dairy-based preparations (HS Codes: 1901.90.04 and 1901.90.05)
• Products consisting of natural milk constituents whether or not containing added sugar or other sweetening matter, not elsewhere specified or included (HS Code: 0404.90.99).

Furthermore, under CPTPP, Mexico will eliminate its tariffs on whey, turkey and some chicken products over phase out periods ranging from 10 to 15 years. To obtain more information on the CPTPP regarding trade opportunities under this agreement see: CPTPP for Agri-Food Exporters.

Consolidated TPP Text:

• 2–D: Mexico General Notes to Tariff Schedule
• 2–D: Mexico Tariff Elimination Schedule (PDF version)
• 2–D: Mexico Appendix A–1 Tariff Rate Quotas and Appendix A–2 Country-Specific Allocation for Sugar of Mexico
• 2–D: Mexico Appendix C Tariff Differentials

Under CPTPP, Canadian exports to Mexico will also benefit from modern trade rules in areas such as sanitary and phytosanitary measures and biotechnology, which are expected to minimize adverse impacts to trade. Furthermore, due to geopolitical considerations, another important trend in Mexico that is creating opportunities for Canadian exporters is the diversification of supply sources away from the U.S.

In terms of market access, the majority of raw/fresh/bulk Canadian agri-food products already have sanitary protocols in place allowing their export to Mexico. Processed food products generally do not require a sanitary protocol, and in most cases are just required to comply with the Mexican Official Standard: NOM-051-SCFI/SSA1-2010 (PDF version, in Spanish only), related to labelling of pre-packaged food.

For more information

International Trade Commissioners can provide Canadian industry with on-the-ground expertise regarding market potential, current conditions and local business contacts, and are an excellent point of contact for export advice.

• Overview of the Trade Commissioner Service in Mexico
• Find a Trade Commissioner

For additional intelligence on this and other markets, the complete library of Global Analysis reports can be found on the International agri-food market intelligence page, arranged by region.

Market Overview – Mexico
Global Analysis Report

Prepared by: Kris Clipsham, Market Analyst

© Her Majesty the Queen in Right of Canada, represented by the Minister of Agriculture and Agri-Food (2019).

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