OIL PRODUCTION

Post/New MY 2015/16 total Mexican oil production is forecast to increase 2.9 percent to 1.4 MMT. This increase is driven by population growth (1.2 percent) along with the expected growth in the Mexican economy in 2015. Mexico's Central Bank (BANXICO) estimates GDP growth between 2.5 and 3.5 percent in 2015. Industry sources indicated that crushing is determined by domestic demand for vegetable oils. Traditionally, this demand has growth pegged at the same pace as GDP growth. The New/Post estimate of total Mexican oil production for MY2014/15 has been revised slightly upward from USDA/Official estimate in accordance with more recent industry information.

According to industry sources, the leading oil processors in Mexico, along with U.S. cooperator support, have continued with aggressive trade servicing and promotional activities. Some companies are investing in new retail market labels, in an effort to better integrate and service the Mexican market. For example, several companies have invested in packaging and market their own oil brands in the retail vegetable oil market sector. Also, these companies have successfully promoted soybean and vegetable oil as healthy products. As a result, they continue to enjoy strong consumer demand for their products.

The following is a list of various companies in Mexico that promote their own retail labels and note's where their soybean oil is for sale:

  • RAGASA: "Nutrioli", "Nutrioli DHA", "Nutrioli Spray" and, AVE. Sold in at least seven different Mexican states.
  • PROTEINOL: "Sarita", which is sold in Northwest Mexico Sonora, Sinaloa Baja California, while the label "Victoria" is sold in Central Mexico and HYSA in Veracruz and Yucatan.
  • AYPECSA: "Imperial", sold in Puebla, Oaxaca and State of Mexico;
  • INDUSTRIALIZADORA DE OLEFINOS: "Hogar" in Jalisco, Sinaloa and Sonora;
  • CORAL INTERNATIONAL: "Consentido" and "Primor" in San Luis Potosi, Guanajuato, Queretaro and Mexico City
  • DICONSA: DICONSA, sold in DICONSA stores throughout in the entire country.

Industry sources noted that crushers have been operating between 65-75 percent of capacity; although the big crushers, which are generally more efficient, are operating up to 85 percent of capacity. Moreover, eleven leading companies AGYDSA, Ragasa, Proteinas y Oleicos, La Corona, Olefinos, Cargill, Industrial Aceitera, AAK, Patrona, Capullo, and Coral Internacional, continue to account for nearly 80-85 percent of total domestic oil production.

Soybean Oil Production

The Post/New MY 2015/16 soybean oil production forecast is estimated to increase 30,000 MT to 790,000 MT from the Post/New MY 2014/15 production estimate. The main factors driving this increase continue to be the greater soybean oil demand in the hotel, restaurant and institutional (HRI) sector, food manufacturers (such as Gamesa, Frito-Lay, Bimbo, Uniliver, Sabritas, etc.) and, albeit in less proportion, the cooking oil sector. Industry sources indicated that a result of strong promotional and marketing efforts, the image of soybean oil as a healthy and high quality product has been positioned quite well with Mexican consumers. Most major companies have increased their oil refining capacity for bottled oil, reflecting the strong soybean oil demand and the bearish scenario in the international soybean market, which is expected to continue in MY 2015/16.

Rapeseed Oil Production

The New/Post MY 2015/16 rapeseed oil production forecast is estimated to increase by approximately 1.7 percent, reflecting the expected growth in the Mexican economy, as already noted. As in previous years, soybean oil continues to constitute the majority Mexico's oil production. In MY 2014/15, for example, soybean oil represented 55 percent of total Mexican oil output, while rapeseed oil represented 44 percent. It is expected these proportions in the Mexican vegetable oil market will continue in MY 2015/16.

Sunflower Seed Oil Production

The New/Post sunflower seed oil production estimate for MY 2014/15 has been revised upward from USDA/Official estimates due to higher-than-expected crush levels. For MY 2015/16 the Post/New sunflower seed oil production forecast is expected to increase to 13,000 MT, as a result of the growing demand from the snack food industry for higher quality vegetable oil. Private analysts noted that the majority of the sunflower oil supply is mid-oleic, which does not require hydrogenation. Mid-oleic oil has no trans-fats, has low monounsaturated fat, and a neutral taste. It is also more durable than most other vegetable oils when used in industrial frying. Private analysts indicated that such qualities could make food processors willing to pay a premium for sunflower seed oil over soybean oil.

OIL CONSUMPTION

The Post/New total Mexican oil consumption for MY 2015/16 is forecast at 1.65 MMT, approximately 3 percent higher than the previous year's estimate. As in the last few years, this increase is driven by greater demand from the industrial and retail sectors due to population growth and the shifting consumer preferences toward mid-oleic vegetable oils. Private analysts noted that the industrial sector, including snack and bakeries manufactures, continue opting to cook with oils with reduced linoleic acid and reduced amounts of hydrogenated oil in their products. Another factor that has shown to spur this consumption increase is marketing campaigns at the retail level. Major oil refinery and crusher companies have implemented marketing campaigns that emphasize the "good for the health" attributes of vegetable oils. At the same time, the U.S. Soybean Export Council (the cooperator organization representing U.S. soybeans in Mexico) has continued to successfully collaborate with several of the main Mexican oil refineries and crusher companies. USSEC's support, among other things, provides technical advice and educational efforts to help with effective promotion campaigns as well as valuable marketing and public relations techniques, all with the aim to increase confidence and knowledge about U.S. soybean products and ultimately increase demand for U.S. soybean oil throughout the country. According to the USSEC, these efforts have increased vegetable oils consumption for companies such as Proteinol, Agydsa, AYPECSA in Mexico City and the Northwestern part of the country.

The MY 2013/14 oil consumption figure was revised downward from USDA/Official estimate, reflecting the recent information from private sources.

Soybean Oil Consumption

Soybean oil continues to dominate vegetable oil consumed in Mexico, holding a 59 percent share of the market. For MY 2015/16, soybean oil consumption is forecast to increase 3.2 percent to 976,000 MT, as a result of the factors mentioned above and the expected growth in the Mexican economy.

Rapeseed Oil Consumption

The Post/New MY 2015/16 rapeseed oil consumption forecast is increased to 665,000 MT from the estimated of MY 2014/15, due to market preference for this vegetable oil. Rapeseed oil is expected to maintain a 40 percent market share in MY 2015/16, similar to the market share in the MY 2014/15.

Sunflower Seed Oil Consumption

The Post/New sunflower seed oil consumption estimates for MY 2015/16 is forecast to reach 17,000 MT. The increase is driven by the expectation that the HRI sector will continue consuming mid-oleic oil that has no trans-fats, low monounsaturated fat and neutral taste. Moreover, the sunflower seed oil is reported as more durable than most other vegetable oils when used in industrial frying. Private sources stated that such qualities could make food processors willing to pay a premium for sunflower seed oil over soybean oil.

OIL TRADE

With the expected increase in domestic vegetable oil production, the Post/New MY2015/16 total oil imports are forecast to decline to 286,000 MT. As noted, the big crushing companies, mainly those that have crushing facilities, refined vegetable oils and service different market segments, have been increasing investments in their facilities in order to increase domestic crushing and attend to the growing domestic demand for vegetable oils and oil meals. Despite the fact that the total oil import forecast in MY2015/16 is forecast to decline, imports from the United States are still expected to capture about 70 percent of total oil import trade.

The Post New total oil import estimate for MY 2014/15 has been revised upward to 302,000 MT from the USDA/Official estimate based on private traders' information and preliminary official data from SAGARPA and the General Customs Directorate of the Finance Secretariat (SHCP) covering the first months of the marketing year. Similarly, the Post/New total oil import and export estimate for MY2013/14 have been revised downward and upward, respectively, based on revised GTA data.

Rapeseed oil imports for MY 2013/14 and MY 2014/15 have been adjusted downward and upward, respectively, based on updated data from the GTA in the first year and industry sources in the second year.

For MY 2015/16 the Post/New sunflower seed oil import estimate is forecast to increase approximately 2.8 percent to 36,000 MT, assuming competitive international prices and increased demand of this edible oil. The Post/New MY 2013/14 import estimate for sunflower seed oil was adjusted downward slightly to 33,000 MT from USDA/Official estimate, based on updated GTA information. Also, the Post/New MY 2013/14 and MY 2014/15 sunflower seed oil export estimates were adjusted upward slightly based on GTA figures in the first year and industry information in the second year. However, again industry sources stated that the export figures basically reflect oil safflower exports more than sunflower seed oil exports, but there is no way to exactly distinguish the amount of each commodity, as both are reported under the same HTS codes.

Mexico: Production, Supply, and Distribution (PSD) for Total Oils

Total Oils

Market Begin Year

2013

2014

2015

Mexico

USDA Official

New post

USDA Official

New post

USDA Official

New post

Crush

5495

5497

5756

5770

0

5951

Beginning Stocks

128

128

148

143

0

168

Production

1307

1307

1367

1372

0

1413

MY Imports

288

281

292

302

0

286

MY Imp. from U.S.

225

210

225

225

0

200

MY Imp. from EU

0

18

0

0

0

0

Total Supply

1723

1716

1807

1817

0

1867

MY Exports

32

41

32

37

0

38

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

5

5

6

6

0

6

Food Use Dom. Cons.

1538

1527

1606

1606

0

1652

Feed Waste Dom. Cons.

0

0

0

0

0

0

Total Dom. Cons.

1543

1532

1612

1612

0

1658

Ending Stocks

148

143

163

168

0

171

Total Distribution

1723

1716

1807

1817

0

1867

1000 MT, PERCENT

Mexico: Production, Supply, and Distribution (PSD) for Soybean Oil

Oil, Soybean

2013/2014

2014/2015

2015/2016

Market Begin Year

Sep 2013

Sep 2014

Sep 2015

Mexico

USDA Official

New post

USDA Official

New post

USDA Official

New post

Crush

4,030

4,030

4,250

4,250

0

4.400

Extr. Rate, 999.9999

0.1787

0.1787

0.1780

0.1780

0

0.1795

Beginning Stocks

109

109

136

136

0

146

Production

720

720

760

760

0

790

MY Imports

201

201

200

200

0

190

MY Imp. from U.S.

195

195

195

195

0

185

MY Imp. from EU

0

0

0

0

0

0

Total Supply

1,030

1,030

1,096

1,096

0

1,126

MY Exports

4

4

4

4

0

4

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

5

5

6

6

0

6

Food Use Dom. Cons.

885

885

940

940

0

970

Feed Waste Dom. Cons.

0

0

0

0

0

0

Total Dom. Cons.

890

890

946

946

0

976

Ending Stocks

136

136

146

146

0

146

Total Distribution

1,030

1,030

1,096

1,096

0

1,126

1000 MT, PERCENT

Mexico: Production, Supply, and Distribution (PSD) for Rapeseed Oil

Oil, Rapeseed

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

Oct 2015

Mexico

USDA Official

New post

USDA Official

New post

USDA Official

New post

Crush

1,450

1,450

1,490

1,490

0

1,520

Extr. Rate, 999.9999

0.4

0.4

0.4026846

0.4027

0

0.4013

Beginning Stocks

19

19

12

7

0

22

Production

580

580

600

600

0

610

MY Imports

52

47

57

67

0

60

MY Imp. from U.S.

20

9

20

20

0

15

MY Imp. from EU

0

18

0

0

0

0

Total Supply

651

646

669

674

0

692

MY Exports

2

2

2

2

0

2

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

637

637

650

650

0

665

Feed Waste Dom. Cons.

0

0

0

0

0

0

Total Dom. Cons.

637

637

650

650

0

665

Ending Stocks

12

7

17

22

0

25

Total Distribution

651

646

669

674

0

692

1000 MT, PERCENT

Mexico: Production, Supply, and Distribution (PSD) for Sunflower Seed Oil

Oil, Sunflower seed

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

Oct 2015

Mexico

USDA Official

New post

USDA Official

New post

USDA Official

New post

Crush

15

17

16

30

0

31

Extr. Rate, 999.9999

0.4667

0.4118

0.4375

0.4

0

0.4194

Beginning Stocks

0

0

0

0

0

0

Production

7

7

7

12

0

13

MY Imports

35

33

35

35

0

36

MY Imp. from U.S.

10

6

10

10

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

42

40

42

47

0

49

MY Exports

26

35

26

31

0

32

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

16

5

16

16

0

17

Feed Waste Dom. Cons.

0

0

0

0

0

0

Total Dom. Cons.

16

5

16

16

0

17

Ending Stocks

0

0

0

0

0

0

Total Distribution

42

40

42

47

0

49

1000 MT, PERCENT