Earlier this month, the governments of Mexico and Brazil announced the opening of Mexico’s rice market to Brazil and Brazil reciprocated by opening their market for dry beans to Mexico.
The opening in Mexico is for milled rice only. Brazilian paddy rice is permitted, however, the presence of the fungus phona sorghina in Brazilian production fields, which is a restricted fungus in Mexico, has impeded actual exports.
The opening for Brazil is consistent with Mexico’s policy to diversify its market, especially for grains, for nearly every major origin as a means to lower prices and ensure food security for its population.
The impact for U.S. rice exports to Mexico is considered negligible by many in the local import trade. “We can already source duty-free milled rice from every major origin, including the U.S., Uruguay, Argentina, Thailand, Vietnam, and India,” said one major Mexican importer.
“Brazil does give us another option, but logistically it’s a bit more difficult. The biggest competition for U.S. milled rice sales in Mexico continues to be Uruguay for quality, and paddy rice milled at Mexican mills for price.”
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Mexico imports about 85 percent of its rice consumption and nearly 75 percent of those exports are rough rice, the majority of which comes from the U.S.
On the milled side, Uruguay has established itself as the quality leader making up about 60 percent of the milled market. U.S. milled rice makes up close to 30 percent of the market, with Argentina, Thailand, and others covering the rest.
The trade reports that while Uruguayan rice is a bit more costly, it sells quicker and at greater profit margins than imported U.S. milled rice.