Mexico has emerged as one of the powerhouses of the international produce sector in the last 10 years and has seen a huge growth in overall fruit production, from 13.9 million to 17.4m tonnes. At the same time, over-dependence on its own domestic market and the large US market has been a strong trend and relatively little progress has been made in the diversification of its international export markets. This poses potential problems for the future.
The development of the primary production sector has been impressive. It has seen significant increases across a range of produce, which now includes oranges accounting for some 4.2mt, bananas accounting for just under 2mt, mangoes at some 1.9mt, lemons and limes at around 1.9mt and avocados at some 1.1mt. There have also been increases in a range of other fruit, such as melons, up to 1mt, papaya, up to 0.9mt, soft citrus at 0.4mt, melons at 1mt, and soft fruit, which has increased from 100,000t to 175,000t a year.
However, using the following examples of selected key crops, it is clear that over the last 10 years there has often been relatively little fundamental change in the overall direction of trade in the fresh produce sector. This has not been the case in many of Mexico’s neighbouring countries, such as Chile, Brazil and Argentina - all of which have been developing new markets. On a crop-by-crop basis, the following should be noted:
• Grapes - Exports have grown impressively, from around 80,000t a year to more than 160,000t, but the US market is by far the biggest receiver of Mexican fruit. Only very small exports are made to other regions of the world. The US market still accounts for almost 100 per cent of all Mexican exports.
• Mangoes - Exports of mango have actually fallen from around 375,000t to 245,000t a year, and trade to the US has fallen from virtually 100 per cent of all exports to around 200,000t - around 80 per cent. The balance is accounted for by a combination of exports to Canada, Switzerland, Japan and Australia.
• Avocados - With the removal of phytosanitary barriers, Mexican exports to the US have soared, from under 10,000t a year to more than 210,000t, now accounting for around 70 per cent of all exports. At the same time, there has also been a significant increase in exports to the EU, especially to the UK, France and the Netherlands, as well as the likes of Canada and Japan.
• Melons - Exports have increased dramatically, from around 285,000t to more than 480,000t in a 10-year period, but the US market is totally dominant and accounts for all but 100 per cent of total Mexican exports.
• Strawberries - While Mexican strawberry exports have soared to more than 65,000t, these have been almost exclusively aimed at the US market, which accounts for 99 per cent of all exports, and with only very modest sendings to the EU and other Central American countries.
• Lemons and limes - Mexican exports have boomed from 195,000t to 460,000t a year, but again the US market is totally dominant and accounts for around 95 per cent of all exports.
To date, a fast-growing home market of some 110m and strong exports to the US have been enough to sustain the development of the Mexican horticultural sector. If the industry is really to make its mark internationally, however, it will need to develop new markets in other parts of the world such as the EU, Japan and the Pacific Rim, as well as the fast-emerging markets of Russia, India and China. This will require new skills in terms of market research and business development, logistics and, in some cases, the formation of joint ventures and alliances with locally based produce companies. This will give Mexican businesses enhanced local market access and enable them to take advantage of distribution and marketing opportunities.
Being successful in lots of markets around the world takes time and effort. It is also notoriously difficult to achieve. Ranking the real priority markets is a must for the Mexican export effort, based on a range of market and trade-based criteria. The danger is that the industry is dragged into lots of potential markets that all offer some opportunity and interest, but there is less focus on the markets that Mexico really wants - and those that really want Mexico as a supplier.
John Giles is a divisional director with Promar International, a leading agri-food marketing and business development consulting firm and a subsidiary of Genus plc. Promar has carried out a good deal of work in the international fruit sector. This includes projects in Central and Latin America, as well as analysis of key international markets in the EU, eastern Europe, the Middle East, North America and Asia. John can be contacted at jgiles@promar-international.com
