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USDA Foreign Agricultural Service GAIN Report

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Voluntary Report - public distribution Date: 5/3/2005 GAIN Report Number: MX5039 MX5000 Mexico Agricultural Situation Weekly Highlights and Hot Bites, Issue #16 2005

Approved by: Suzanne E. Heinen U.S. Embassy Prepared by: Benjamín Juárez, Dulce Flores, Bruce Zanin, Marissa Chavez, and Carlos González

Report Highlights:  POULTRY SECTOR IS FOCUSING ON AN EXPORT PROGRAM  HIGH FEES AT MEXICAN PORTS  MEXICAN CATTLE TO BE AUCTIONED OFF BY INTERNET  SALES GROWTH AT COMERCIAL MEXICANA  MARKET OPENING BURDENS FARMERS

Includes PSD Changes: No Includes Trade Matrix: No Unscheduled Report Mexico [MX1] [MX] GAIN Report - MX5039 Page 2 of 3

Welcome to Hot Bites from Mexico, a weekly review of issues of interest to the U.S. agricultural community. The topics covered in this report reflect developments in Mexico that have been garnered during travel around the country, reported in the media, or offered by host country officials and agricultural analysts. Readers should understand that press articles are included in this report to provide insights into the Mexican "mood" facing U.S. agricultural exporters. Significant issues will be expanded upon in subsequent reports from this office.

DISCLAIMER: Any press summary contained herein does NOT reflect USDA’s, the U.S. Embassy’s, or any other U.S. Government agency’s point of view or official policy.

POULTRY SECTOR CREATING A NEW EXPORT PROGRAM

The Mexican Poultry Producers Association (UNA) held its 43rd Ordinary General Assembly on April 25-26, where the new President of UNA, Justo Lopez Hernandez, was introduced. Cesar de Anda, the outgoing President, announced the creation of an export program between UNA and the government. The Secretariats of Economy and Agriculture signed an agreement with UNA during the event to create a competitiveness program (Aviexporta) for the poultry sector to prioritize the tasks necessary to consolidate and foster a major presence in the international market for this sector. According to de Anda, the program intends to increase exports by 25 percent within the next ten years and create 500,000 additional jobs. It was also announced that Mexico is working jointly with the United States and other countries to consolidate a World Poultry Organization. (Source: El Financiero, La Jornada; 04/27/05)

HIGH FEES AT MEXICAN PORTS

The Mexican Port and Mercantile Marine Commission is working on a study detailing how to reduce fees at Mexican ports. According to international sources, Mexico's port costs are the highest in the world. Examples of port fees per ship with 2,800 twenty-foot containers are $283,000 in Veracruz and $228,000 in Manzanillo (Mexico's main ports) compared to $269,000 in Tokyo, $227,000 in New York, $155,000 in Hamburg and $135,000 in Rotterdam. These costs do not include the payment of US$ 120 plus a 15 percent value added tax per twenty-foot container that enters or leaves a Mexican port. The fees consist of three parts: use of the port, a per ton fee, and pilot and docking fees. (Source: El Financiero, 4/28/2005)

MEXICAN CATTLE TO BE AUCTIONED OFF BY INTERNET

According to the Chihuahua Regional Cattle Union, Mexican cattle producers will use the Internet for the first time ever to auction off their animals to foreign buyers on May 3. The buyers, mainly from the U.S., will be able to negotiate directly with Mexican cattle producers. Photographs and details of the cattle will be available online. The electronic transaction will allow the seller to obtain better prices and locate better buyers for their cattle at any time of

UNCLASSIFIED USDA Foreign Agricultural Service GAIN Report - MX5039 Page 3 of 3 year. The use of the Internet is expected to offer greater transaction security as well as speedy payments. (Source: El Universal; 4/27/2005)

SALES GROWTH AT COMERCIAL MEXICANA

The national supermarket chain, Comercial Mexicana, announced that profits grew in the first quarter of 2005 by 31 percent, to US$ 40 million (451.2 million pesos). Overall sales increased 3.1 percent over the same period in 2004, to US$ 803 million (9.0574 billion pesos). Both figures surpassed analysts' expectations. (Source: El Financiero, 4/28/2005)

MARKET OPENING BURDENS FARMERS

According to several agrarian leaders, the accusations between the GOM and rural organizations regarding the fulfillment of the National Agreement on Agriculture (ANC) have left the future of 3.5 million common-land farmers ("ejidatarios") uncertain, without legal instruments to face NAFTA’s 2008 trade opening, two years after the ANC's signing. Heladio Ramirez-Lopez (the leader of the National Farmers Confederation – CNC), Alvaro Lopez-Rios (the president of the Agricultural Committee in the Lower House), and Rafael Galindo (the president of the Special Committee for the Countryside, also in the Lower House) blamed the GOM for failing to fulfill the ANC. At the same time, however, the Agriculture Ministry (SAGARPA) congratulated the positive outcomes of the ANC two years after its signature. According to SAGARPA, among ANC's main achievements are the implementation of new financial supports for farmers, the approximately 30 percent discount for diesel fuel used for agricultural purposes, and the study on the effects of NAFTA on Mexican agriculture. (Source: El Financiero, El Universal; 04/29/2005)

REPORTS RECENTLY SUBMITTED BY FAS/MEXICO CITY

NUMBER TITLE DATE MX5038 Weekly Highlights and Hot Bites, Issue #15 04/28/05

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