The Mexican government's drive to pivot away from US corn imports will fall flat,. at least for next season, US foreign staff said, with no shift toward competing origins expected.
The US Department of Agriculture's bureau in Mexico City forecast Mexican corn imports in 2017-18 flat year-on-year, at 13.40m tonnes, thanks to moribund demand and rising production.
But the US market share will be unchanged, with all but 200,000 tonnes of imported corn sourced from Mexico's northern neighbour.
Mexican corn production is seen up 1.25m tonnes year on year, at 25.25m tonnes next season.
Threats of Mexican pivot
This forecast raises questions over ideas that Mexico will be able, short term, to reduce its huge reliance on imports from the US.
"Private sources indicated that as Mexico becomes a more attractive and sophisticated importer, some other countries that produce yellow corn, such as Brazil and Argentina, have shown interest in exporting to Mexico," the bureau said.
And the bureau noted recent statement from the Mexican government "indicating that it has a strategic objective to increase diversification of its agricultural import suppliers"
"In the longer term, this could mean that Mexico would not rely only on US corn imports, as is currently the case," the bureau said.
Rhetoric grows fiercer…
This rhetoric has ramped up in recent months, in response to the election of Donald Trump as US president.
Mr Trump ran in part on a mandate of renegotiating the North American Free Trade agreement, which includes Mexico, and Canada, to gain more agreeable terms for the US.
Last week Mexico's Economy minister Ildefonso Guajardo said that any country-specific rules of origin within the North American Free Trade Agreement (NAFTA) would be "totally unacceptable".
…but many doubt if threats have teeth
The threat of a pivot away from US grain imports is seen as a warning shot by the Mexican government, ahead of any fresh negotiations.
But many investors have shrugged off the threats, suggesting that Mexico has only limited potential to source other supplies, given the significant freight cost advantage enjoyed by US exporters to Mexico.
And the USDA's Mexico City bureau struck a similar sanguine note, suggesting that "given that there have not been any changes to policy or economic factors, it is expected that over the mid-term at least, Mexico will remain a substantial importer of corn from the United States".