Mexico's Coffee Market Finds Growth Potential Amid Trade Volatility Introduced By US Tariffs On Brazil – CoffeeTalk

Mexico’s coffee market, while relatively small in global terms, is poised for growth through technology investments and sustainable farming practices amidst trade volatility. Currently the 10th largest coffee producer, Mexico harvests about 3.87 million 60 kg bags annually, constituting 2% of worldwide production, primarily focused on Arabica, although there are opportunities to grow Robusta. After enduring a significant production decline due to the coffee crisis, weather fluctuations, and pricing issues, Mexico’s coffee output has rebounded, growing from 2.3 million bags in 2015 to its current level.

Industry leaders emphasize the necessity for collaboration among stakeholders including banks, universities, and companies to enhance production and resource management, such as investing in irrigation systems. Henrik Öhman of Exportadora de Café California highlights the need for industrialization to compete more effectively with major producers like Brazil and Vietnam.

Trade policy shifts, particularly U.S. tariffs impacting Brazilian imports, present potential advantages for Mexico, allowing it to capture a share of the market by exporting more coffee to the U.S. while remaining cautious of market fluctuations. Tariffs have paused for Mexican imports until late October; however, should conditions change, financial risks associated with stockpiling expensive imports may arise.

The Mexican government is encouraged to facilitate the entry of new coffee varieties to enhance cultivation, but current restrictions due to pest concerns hinder this progress. Additionally, government-led initiatives, such as Sembrando Vida, intended to support coffee farming by providing subsidies for planting, have yet to yield tangible increases in production.

For those interested in further insights into Mexico’s coffee industry, the World Agri-Tech Innovation Summit in Mexico City will host discussions on sustainable production practices, featuring a panel of experts from across the supply chain.

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