Total soybean production is forecast to increase slightly due to higher planted area in marketing year (MY) 2022/23.
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However, the cancellation of federal commercialization support programs for medium and large oilseed growers has discouraged the planting intentions for the upcoming year.
Consequently, peanut production is forecast to go unchanged at 92,000 metric tons (MT), based on stable acreage and average yield.
In Mexico peanuts are used almost entirely as a snack food, with practically no crushing or processing occurring. Moreover, peanut consumption in Mexico is typically related to social gatherings and outings such as at bars, shows, and cinemas.
Rapeseed and sunflower seed production will remain unchanged at the very low levels of previous years due to the lack of government supports.
Mexico’s oilseed crushing is forecast to increase by approximately 2.9 percent in MY 2022/23, despite the expected slowdown in Mexico’s economy.
This increase is driven by the continued demand for meals in the livestock sector, stable population growth, and the gradual recovery of the Hotel Restaurant and Institutional (HRI: hotels, restaurants, cinemas, theaters, stadiums, etc.) sector in the case of vegetable oil demand.
On other hand, total consumption of oilseed products is expected to increase a mere 2.7 percent in MY 2022/23 because of the economic slowdown and relatively sluggish demand triggered by persistent inflation.
With Mexico’s expected macro-economic slowdown, price should continue to be the main
factor in oilseed sales.
According to private sources, a main point of concern for the Mexican industry that produces edible oils and oil meals is the U.S. biodiesel subsidy policy, which would cause a drop in the supply of soybeans available for export in the United States, Mexico's main supplier.
Additionally, it would make U.S. soybean oil exports more expensive.
Finally, there would be an oversupply of soybean meal. Given these factors, private sources expressed that solutions should be found to allocate this eventual surplus without affecting the local US market or the export markets of US buyers.
Bulgaria competes with shelled sunflower seeds and price while Argentina competes in the in-shell sunflowers seed market. Mexico is the third most important partner for U.S. sunflower seeds.
It should be noted that recently Mexico’s Central Bank (Banxico) cut its Gross Domestic Product (GDP) growth projection for 2022 to 2.4 percent from its previous estimate of 3.2 percent.
Banxico cited the pandemic’s uncertain economic impact and its disruptive effects on the supply chain, as well as persistent high inflation rates as the main reasons for the revised figure. Private analysts also revised their initial growth expectations down to 2 percent, whereas the International Monetary Fund (IMF) foresees a 2.8 percent GDP growth.
According to the National Institute of Statistics and Geography (INEGI), consumer price inflation rose from 7.07 percent in January to 7.28 percent in February, more than double the target rate set by Banxico.
Core inflation, which strips out some volatile items, accelerated by nearly four tenths of a percentage point to 6.59 percent, the highest rate since mid-2001. ■