U.S. corn refiners prepare to re-enter Mexican market

U.S. corn refiners prepare to re-enter Mexican market

   U.S. shippers of high fructose corn syrup applauded an agreement reached by the United States and Mexico Friday that will allow them to begin rekindling trade with Mexico.

   The U.S. Department of Agriculture announced a 15-month high fructose corn syrup (HFCS) tariff-rate quota to Mexico, starting Oct. 1, which is expected to completely lift Mexico’s trade restrictions on this commodity by Jan. 1, 2008.

   “The corn refining industry welcomes this agreement that guarantees access for HFCS to the Mexican market, eliminates the soft drink tax and removes all tariffs on HFCS exports,” said Audrae Erickson, president of the Washington-based Corn Refiners Association, in a statement. “It sets in motion an irreversible path to free trade in January 2008, as the NAFTA intended.”

   The deal provides for 250,000 metric tons (dry basis) of HFCS access into Mexico for the first 12 months and a minimum of 175,000 metric tons, or up to a maximum of 250,000 metric tons, for the remaining three months. An equal amount of access will be granted to Mexico sugar exports to the United States.

   In January 2002, the Mexican Congress enacted a 20 percent soft drink tax, which shut down trade of HFCS from U.S. producers. The impasse, however, dates back to 1997.

   The Corn Refiners Association estimates that Mexico’s decade-long trade restrictions have cost the industry $4 billion in lost HFCS business, or an excess of 800 million bushels of corn production, including lost corn sales to Mexico intended for sweetner production.