Corn and wheat: the greatest pressure on prices in Mexico

Among the greatest pressures on the prices of the main foodstuffs imported by Mexico were corn and wheat, according to the Bank of Mexico (Banxico).

In the unprocessed products segment, the accelerated increase in import prices as a result of the pandemic, which was exacerbated by the conflict between Russia and Ukraine, stands out.

This conflict and the trade sanctions imposed on Russia have resulted in a sharp increase in the price of several raw materials.

This is a result of disruptions in the production and supply of such goods, as well as the uncertainty surrounding the duration and depth of the war.

Ukraine is a major producer and exporter of grains, mainly wheat, corn and barley.

In turn, Russia is a supplier to the external market of agricultural products (such as wheat and rye) and agricultural inputs (fertilizers).

The outbreak of the conflict between the two nations caused the international prices of various food commodities, which were already showing a positive trend, to come under even more pressure and reach record highs.

Corn

Although these factors pressured agricultural commodity prices in general, the pressures appear to have been greatest on the prices of the main food commodities that Mexico imports, such as corn and wheat.

Prices of Mexico’s unprocessed food exports have also shown significant growth.

However, this has been relatively lower than that of import prices.

Indeed, in the case of the main agricultural products exported by Mexico, such as avocados, vegetables (chayotes, chard and spinach, among others), tomatoes and tomatoes, their prices did not show increases of the same magnitude as those recorded for agricultural imports.

Similar to what was observed for unprocessed products, for processed goods, the unit value index of imports grew at a faster rate than that of exports during the sanitary emergency.

However, there was also a strong increase in the volume exported during this period, maintaining the upward trend that had already been observed for several years.

It is estimated that those exported products that have shown the greatest growth in nominal value have been alcoholic beverages, such as malt beer, tequila and mezcal, and bakery products.