With a population of approximately 130 million, Mexico is the second most crowded country in Latin America after Brazil and the 11th in the world. Connecting South America to North America and the Pacific Ocean to the Mexican Gulf, Mexico has a total of 9,330 km of coastline, high mountains, low coastal plains, high plateaus, and a rich topographical structure including deserts. 12% of the country's land consists of arable land, and 1.4% of regularly harvested areas.
Mexico is the second-largest economy in Latin America following Brazil and the 15th in the world. It ranks the 11th in the world in terms of population size. In addition, other main export products of Mexico, which is the 12th largest oil producer in the world, are automotive key and sub-industry, electric-electronic, tractors, furniture, medical devices, gold, silver, alcoholic beverages, avocados, tomatoes, biscuits, beef, confectionery, walnuts, and sugar cane.
Mexico has concluded 12 Free Trade Agreements (FTA) with 46 countries in total. It conducts more than 90% of its trade with these countries. The Pacific Alliance and the Trans-Pacific Partnership have come to the fore in recent years as part of Mexico's efforts to diversify its foreign trade.
Mexico, which has one of the strongest economies in Latin America, is the world's 5th largest "emerging market" following China, Brazil, Russia, and India. With the effect of the economic transformation it has passed through since the 1980s and the effect of NAFTA that came into force in 1994, Mexico has a liberal economy, whose trade with the USA and Canada has increased threefold. However, the monopolized private and public companies in the national economy is an important structural factor that restricts competition and productivity, increases prices, and decreases service quality.
Although its weight in the country's economy has decreased in recent years, oil revenues still constitute 10% of export revenues and one-third of total public revenues. State-owned oil company Pemex is the 7th largest oil company in the world.
Economic activities are generally concentrated in the capital. The state where Mexico City, the capital, is located, produces 20% of GDP and is the center of heavy industry. Mexico's manufacturing industry and factories, where manufacturing goods exported particularly to the United States are produced and sold, are mostly located in the six states on its northern border (Baja California, Sonora, Chihuahua, Coahuila, Nuevo León, and Tamaulipas).
[caption id="attachment_4970" align="aligncenter" width="660"] RETAIL SALES OF BAKERY PRODUCTS BY PRODUCT TYPE IN MEXICO IN 2019 (MILLION $)
Jalisco, Puebla and Guanajuato are states with the highest welfare and the most developed manufacturing industry. Veracruz stands out with its agriculture and oil industry. Of the states in the Mexican Gulf, Quintana Roo has developed in terms of tourism. Although about half of the country is considered to be poor, this rate reaches 75% in the southern states where agricultural production is intense. Poverty rates are also high in some districts of Chiapas, Oaxaca, Guerrero, and the Pacific coast.
The immigration between Mexico and the USA has been prevented by establishing "maquiladora" production zones, where foreign investments took place and which allowed the production of duty-free and quota-free intermediate and capital goods, with the proposal of the USA, and both countries benefited from this system. The advantage of the USA has been to stop human migration to its country and to increase its market power in third world countries by producing low-cost manufactured goods by contract manufacturing. Mexico provided employment opportunities by accelerating the inflow of foreign capital solved some of its economic problems, and gained qualified manpower working in these production areas.
MEXICO EXPORTS WHEAT TO TURKEY
According to the data obtained by the Ministry of Commerce, wheat comes first among the products imported by Turkey from Mexico. While 106 million dollars of wheat and meslin were imported from Mexico in 2019, this figure increased to 113 million dollars in 2020. Dried legumes and cotton are also among the products Turkey imports from Mexico.
The Mexican agribusiness industry is in steady and constant expansion partly related to strong consumer demand and an ever-growing middle class. With a large landmass and a wide range of climates, Mexico is well adapted to large-scale agricultural production.
Mexico is the most populous Spanish-speaking country in the world. It is a market with over 128 million people, the 11th largest population in the world. Its $1.2 trillion economy makes it the second-largest in Latin America and the 15th largest in the world. Mexico has a large and diversified economy linked to deep trade and investment relationships with the United States.
Mexico's economy is diversified, including high-tech industries, oil production, mining, and manufacturing. The agricultural sector is powerful, diversified, and strongly integrated with the United States. Agriculture represents 3.42% of Mexico's GDP and employs more than 12.97% of the country's labor force. However, the credit problem continues to hurt this sector. Mexico is the 11th largest agricultural and livestock producer in the world and the 3rd largest producer in Latin America. Mexico is among the world's largest producers of coffee, sugar, corn, oranges, avocados, and limes. Livestock and fishing are also among prominent areas in the food industry.
[caption id="attachment_5026" align="aligncenter" width="1247"] Key Economıc Indıcators
The agribusiness industry in Mexico is in constant and steady expansion, driven in part by strong consumer demand and an ever-growing middle class. Mexico is well adapted to large-scale agricultural production with a large landmass and climate diversity. The extremely fragmented state of Mexican agriculture leaves important room for consolidation and increased yields.
The United States remains Mexico's main agribusiness partner, purchasing $25.5 billion (about 78 percent) of Mexico's total agricultural exports. Overall, the United States' market share in Mexico has remained high as geographic advantages continue to make the US the top supplier for most major agricultural products. However, given the uncertainties of bilateral trade, Mexico has been active in seeking alternative sources of supply.
Mexico is the United States' main export country for maize, wheat, and rice, and although it is a producer of these grains, it is an important market for American sorghum. Overall, Mexican grain imports continue to increase in relation to the demand for animal feed, particularly maize, and increased demand for wheat-based bread types and baked goods.
The United States Department of Agriculture (USDA) expects Mexican grain production to increase modestly as a result of new government programs that encourage smallholder farmers to produce staple grain types. The USDA's Mexico report gives the following information in a nutshell:
Overall feed grain demand is expected to continue to grow at a steady rate of around 3 percent in the 2019/20 season. Corn continues to be the preferred food grain in Mexico, given its low international prices and nutritional characteristics. Meanwhile, demand for grain for human consumption is projected to grow more slowly around population growth.
Mexico remains to be a major importer of staple grains. Imports are expected to sustain the modest growth level to meet the growing demand for food and grains.
SWITCH TO CORN PRODUCTION INCREASES RAPIDLY
There are about 28 thousand wheat producers in Mexico, largely concentrated in the northern states of Sonora, Sinaloa, and Baja California. Total wheat production is expected to be relatively strong at 3.1 million tons. Producers state that relatively low wheat prices have encouraged many producers to switch prefer wheat in recent years. Corn has a higher yield and therefore farmers regard it as an attractive alternative.
Wheat consumption is expected to increase moderately by about 1.4 percent in the same season, mainly due to population growth. Similarly, consumption increased as sales of bread products recovered after a slowdown in consumption, partly due to advertising campaigns advocating reduced calorie intake. Total consumption is expected to remain stable at 7.7 million tons.
WHEAT SUPPLIER IS THE USA
Mexico has many various wheat markets. In southeastern Mexico and the Bajío region, millers and bakers frequently use wheat for the national bread, both due to convenient logistics and regional preferences for bread. In central Mexico, including the Mexico City metropolitan area, the bakery industry's preference for flours with high protein content facilitates the production of the crispy and hollow bread types preferred by consumers in this region. It is logistically easier to use imported wheat, both in Mexico City and most of northern Mexico.
There are 85 mills belonging to 11 large countries throughout Mexico. These mills continue to be modernized with more efficient equipment and old mills are being replaced. The installed processing capacity has been increased up to 9.4 million tons of wheat. However, only about 6.6 million tons of this capacity is currently being used.
The United States, followed by Canada, continues to be the largest wheat supplier of Mexico. However, Mexico has managed to diversify its wheat sources in recent years with secondary suppliers which vary both in price and quality. In recent years a significant increase in imports from Russia and, to a lesser extent, from Ukraine has taken place.
WORLD'S 6TH LARGEST CORN PRODUCER
Estimated corn production for the 2019/20 season (October-September) in Mexico is 27.1 million tons and the estimated harvested area is 7.3 million hectares. Corn production for the current 2018/19 autumn/winter season is estimated to be 7.7 million tons, quite close to the last year. Total corn production estimations for 2017/18 and 2018/19 had been announced by USDA as 27.6 million tons and 26.7 million tons respectively. However, these figures were revised upwards.
With approximately 3 percent of world corn production, Mexico is the 6th largest corn producer in the world. Corn remains the largest crop in Mexico in terms of production and consumption. Production in Mexico ranges from large-scale, irrigated commercial operations to very small farms growing local varieties on subsistence rainfall lands. Private analysts noted that the Mexican corn market is different from many other countries, as corn is considered primarily a food grain rather than a food grain. Because of this difference, Mexico has developed two different maize markets: one for white maize mainly for human consumption and the other for yellow maize, which is mainly used for food.
Bakery Products in Mexico
Retail sales of bakery products in Mexico were expected to attain a value of close to 20 billion U.S. dollars in 2019. Baked goods were estimated to make up close to 80 percent of all retail bakery sales that year, with a value of nearly 16 billion U.S. dollars. In comparison biscuits and snack products were expected to total 2.5 billion dollars.
Demand for bread and tortilla products in Mexico has been strong during the period. However, Bakery Products and Tortilla Manufacturing industry revenue performance has been meager at best. Over the five years to 2019, industry revenue has increased. Overall, industry conditions have been beneficial, but revenue growth has been weak due to the dynamic of exchange rates and the Mexican wheat supply. In short, industry revenue has been pushed down by falling prices, which have been further compounded via the import of lower-cost foreign wheat, though increases in demand for industry products have enabled a greater quantity of industry products to be sold, thereby increasing industry revenue marginally. Over the five years to 2024, industry revenue is expected to accelerate.This industry comprises establishments that primarily manufacture bread and other bakery products, including biscuits, pastas for soup, corn tortillas, frozen bakery products, flour tortillas and pre-mixed flours.