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Processed food industry in Mexico is 90% self-sufficient

The Mexican processed food industry receives about 90% of its supplies locally, according to an analysis by the Department of Agriculture (USDA).

These supplies include fruits, vegetables, cardboard, glass, plastic, and tin.

Nationally produced goods have certain competitive advantages, such as a better knowledge of the local industry and its needs, and logistical advantages due to its proximity.

But small players can face quality issues, traceability, or lack of ability to fulfill large quantity orders.

The remaining 10% is imported from the United States, Canada, Ireland, Brazil and Chile.

Among others, imported supplies include additives, gums, food preservatives, artificial colors, artificial flavors, and stabilizers.

Until now, the United States remains the main supplier of processing ingredients for Mexico.

The US industry has a good reputation in the Mexican market for its consistent quality, stable supply, and proximity.

Food industry

While third countries (such as Brazil, Chile, Uruguay, and the European Union) continue to advance in various sectors of processing ingredients such as poultry, dairy, and rice, the United States maintains distinct advantages: commercial, geographic, and logistical.

For example, according to the USDA, a US exporter may ship a truck or rail car on a rush order, while such a small shipment would not be economically/temporally viable via a third country ( I would be looking to ship multiple containers or a full load).

On the other hand, international trade will be essential after the Covid-19 pandemic and will be substantial to reactivate the economy.

Since joining NAFTA in 1994, Mexico has negotiated 13 trade agreements with 50 countries, including the Comprehensive and Progressive Treaty of Trans-Pacific Partnership (TIPAT) that entered into force in December 2018 in Canada, Australia, Japan, Mexico, New Zealand, and Singapore.

Then the T-MEC came into effect in July 2020.

Mexico is also in the process of updating its FTA with the European Union, which is expected to be ready in 2021, and recently began talks (December 2020) to have a free trade agreement with the United Kingdom.

 

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