Mexico’s vegetable oil and meal sectors are expected to show slower growth in the 2023/24 marketing year due to reduced consumer spending power, a forecast slowdown in the country’s economy and persistent inflation, according to a report by the United States Department of Agriculture (USDA).
In its Mexico Oilseeds and Products Annual the USDA said it expected oilseed crushing in the country to increase based on population growth and meal demand from growth in the livestock sector.
However, the USDA forecast no significant expansion in the country’s production capacity in the 2023/24 marketing year.
Mexico remained dependent on imported oilseeds and oilseed products, primarily soyabeans from the USA and rapeseed from Canada, the 24 April report said.
Total vegetable oil production in the country was expected to increase by approximately 1.8% in the current marketing year to 1.8M tonnes, with crushing partly determined by domestic demand.
Soyabean oil production in the 2023/24 marketing year was forecast to increase by around 1.5% to 1.2M tonnes, partly due to demand for soyabean meal in the livestock sector.
Soyabean oil remains the major oil produced domestically, accounting for 67% of total production, according to the report.
Mexico’s production of sunflower oil in the current marketing year was expected to remain at similar levels to previous years at around 13,000 tonnes due to steady crushing volumes.
Rapeseed oil production in Mexico was expected to increase by around 2.6% in 2023/24 to 595,000 tonnes to keep pace with expected consumption.
Although palm oil was not included in the report’s overall oil production figures, the USDA said the industry had grown over the last 20 years with palm oil being the third largest oil produced in Mexico by volume last year.
Vegetable oil consumption in Mexico in the current market year was forecast to reach 2.3M tonnes, an increase of around 2% compared to the previous year. The increase was mainly due to the relatively strong performance of the Hotel, Restaurant, and Institutional (HRI) sector, along with population growth.
Approximately 60% of total vegetable oil market demand in the country came from the HRI and industrial sectors, with the remaining share driven by cooking oil for home consumption.
Soyabean oil dominates Mexico’s market and is expected to reach approximately 61% of market share – or 1.4M tonnes – in the 2023/24 marketing year, according to the report.