15 August 2012
Mexico’s Secretariat of Economy (SE) on January 19, 2012 issued a preliminary determination of its antidumping investigation stating sufficient evidence was found to indicate dumping conditions existed on US imports of leg quarters.
During the first quarter of 2012 98% of Mexico’s chicken and turkey imports came from the US with the balance coming from Chile and Canada. Imports account for 17-18% of total broiler meat supplies (note – this does not include all poultry meat) resulting in any tariffs affecting only 8-9% of Mexico’s total broiler meat supplies. In 2013, unlike recent years, production growth should outpace demand and lead to a slight reduction in imports.
On July 31, 2012 the SE announced its official determination related to the anti-dumping investigation. The SE concluded that US exporters participated in unfair trade practices which demand the imposition of compensatory duties. However, because of the AI H7N3 outbreak, Mexico will not impose duties until further notice due to poultry prices having increased to unjustifiably high levels.
On June 13, 2012 Mexico detected avian influenza H7N3 in its poultry flocks. The outbreak has been concentrated in the Mexico State of Jalisco. The State of Jalisco has a total of nearly 90 million layers, breeders and broilers. Official Mexican 2011 figures rank Jalisco as the largest producer of poultry meat and eggs in Mexico. The State of Jalisco poultry meat production represents 11.5% and table eggs 50.3% of total Mexico domestic production.
Approximately 6 million poultry have been destroyed of an affected 10.5 million bird population in response to the outbreak. Out of 384 production units sampled, 41 H7N3 isolates have been identified in poultry farms. Mexico aims to produce 80 million vaccinations to help put an end to the outbreak.
Egg prices in Mexico City, Mexico have climbed from the last week of June 2012 to the first week of July. From May 2, 2012 to August 8, 2012 wholesale prices have climbed 61% while retail prices have risen 71% in Iztapalapa, Mexico City, Mexico in response to the outbreak.
In order to help stabilize egg prices, the SE announced intentions to open a 221,000 metric ton tariff-free tariff rate quota to help stabilize egg prices. The lack of cold storage infrastructure could curb US egg imports due to refrigeration requirements by Mexican and US law. Instead, it is felt by some the US could see increased powdered egg exports to Mexico for use by the food processing industry.
Sources: USDA, AMS, Poultry Market News & Analysis, International Egg & Poultry Review, February 14, 2012; USDA, FAS Gain Report Numbers MX2049, MX2058: Promed-mail. Avian Influenza (48): Mexico (JA) High Path H7N3, Poultry, Vac. ProMed Mail 2012, 30 Jul: 20120730.1220354. www.promedmail.org Accessed 08 August 2012; ThePoultrySite; Sistema Nacional de Informacion e Integracion de Mercados (SNIIM)
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