Market Trends of Mexico Rice Industry
This section covers the major market trends shaping the Mexico Rice Market according to our research experts:
Government Initiatives to Boost Domestic Rice Production
- Rice production in Mexico continues to be dispersed throughout the country. The favorable weather conditions in 2021 in the main growing region of Sonora are expected to positively impact rice production.
- The main reason for the increase in rice production is the support from the Mexican government and encouragement from the Mexican Rice Council. The Mexican government provides generous subsidies to rice farmers through price guarantees, input, and credit subsidies. In addition to direct support, the government also started import duties on rice to increase domestic production. The demand for rice is also one of the market drivers in Mexico.
- Rice production in Mexico was recorded at nearly 0.25 million metric tons in 2021. Sinaloa, Campeche, and Veracruz are the major rice-producing states in Mexico, with more than 20% of the production share. The increased use of new cultivation technologies is estimated to drive the market in the country.
- According to the Mexican Rice Council, the adoption of this new technology by producers with funding from the major rice millers has led to significant production increases in a few of the growing areas. Further, the ministry is also providing a new support program to boost domestic rice production and productivity to increase its market share in the Mexican market and provide an alternative crop to improve farmers' income.
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The United States is the Major Exporting Partner
- Mexico primarily depends on rice imports because of its low domestic production. The country imported USD 399.1 million of rice in 2021, a decrease of 12.1% from USD 447.6 million in 2020.
- The United States is the major supplier of rice to Mexico, with 65.7% of the total rice value imported by Mexico, followed by South American countries like Uruguay and Paraguay. Importing from Asian countries is very low due to the phytosanitary restrictions imposed by the Mexican government on the imports of Asian rice.
- Further, in 2020, the passage of the modernized NAFTA, the US-Mexico-Canada Agreement (USMCA), provides long-term market certainty for US exports shipped to Mexico, despite the diversification of sourcing.
- The Ministry of Agriculture and Rural Development (Mexico) reported rice consumption in Mexico between 2021 and 2030 is anticipated to increase from 0.98 million metric tons to 1.37 million metric tons. This increased consumption would further allow the United States to increase the export of rice to Mexico.
