Mexican genetically modified corn spat could affect US sugar trade

NEW YORK —  Mexico’s proposed ban on genetically modified (GM) corn imports could impact other areas of trade with the United States, including the large sugar and corn syrup exchange, according to an independent report released on Thursday.

Mexico’s government of Andres Manuel Lopez Obrador approved a ban of all GM corn from 2025, a regulation that would block most US corn exports to Mexico. The US is the world’s largest corn exporter and is against the ban.

Mexico claims GM corn can hurt its ecosystem by killing some species, an allegation some scientists question. The country also wants to boost local, non-GM corn production.

The report, from trader and supply chain services provider Czarnikow, said the restriction would also block shipments of US high fructose corn syrup, a sweetener used in the food and beverage industry.

“This could lead to severe repercussions. The US could potentially ban the 1.35 million tons of imported Mexican sugar (70% raw sugar, 30% white),” analyst Adrian Torrebiarte said in the report.

According to the US Department of Agriculture, Mexico accounts for nearly half of all the sugar the US imports annually that is projected at 3.46 million short tons (ST) in 2022/23.

“A ban by the US on Mexican sugar could lead to severe complications. The US could give more TRQ allocations to Brazil, the Dominican Republic, or Central American countries,” according to the report.

The TRQs, or tariff rate quotas, are the share of imports that follow World Trade Organization import rules for reduced tariffs. That quota is currently at 1.61 million ST. The TRQs plus the Mexican imports make up 90% of all sugar the US buys every year.

Those low-tariff quotas only cover raw sugar, so Mr. Torrebiarte says the US would still have to replace around 400,000 tons of white sugar, also known as refined sugar, currently imported from Mexico, in case the GM corn ban goes ahead and derails bilateral trade. — Reuters