Mexico Makes Biggest US Corn Buy in Decades as Crop Shrinks
Mexico raided the U.S. corn market by making the biggest one-day purchase in over two decades this week, the first clear sign of global anxiety over the decimated U.S. crop.
Mexico, the No 2 importer of U.S. corn after Japan, bought 1.516 million tonnes, the U.S. Agriculture Department said on Thursday, a move traders said could touch off a frenzy of buying by other countries who have been caught flatfooted by the worst U.S. drought in 56 years.
“The corn sales to Mexico seem like desperation to get some coverage in place,” Bill Nelson of Doane Agricultural Services in St Louis, Missouri.
The deal comes at a time when global consumers are on high alert for a repeat of the 2008 buying spree that many blame for exacerbating the surge in food costs. Gregory Page, chief executive of global grain giant Cargill, warned this week that importers must refrain from racing to stockpile extra grain if the world is to avoid a further damaging spike in prices.
Mexico is particularly sensitive about corn. It is used there to make tortillas, a food staple, the price of which has already risen nearly 18 percent since January, according to Mexico’s economy ministry. Riots broke out over surging tortilla prices in 2008.