Mexico Sets Import Auction Schedule
August 01, 2001
By Brian Clancy
The Mexican government has given the U.S. National Dry Bean Council a written commitment to hold auctions for dry edible bean import licenses on a regular schedule.
Raul Cabellero, the councils representative in Mexico, told delegates to this years U.S. Dry Bean Convention that the auctions are to be held March 1 and June 1 each year. It will start with the 2002 import permit auctions and last until there is free trade in dry edible beans in the year 2009.
Next years auction will cover an estimated 63,339 metric tons (MT) of U.S. origin dry edible beans. The quantity covered by the permit auctions will rise to 65,239 MT in 2003; 67,196 MT in 2004; 69,212 MT in 2005; 71,284 MT in 2006; 73,427 MT in 2007; and 75,629 MT in 2008. During the same period, duty rates on beans will decline to zero.
The move placates the industry, which complained Mexico was not living up to the spirit of the North American Free Trade Agreement (NAFTA) in the manner in which it announced import permit auctions in prior years.
Having a known schedule provides clearer signals about the manner in which sales will evolve each calendar year; while still preserving the ability of the Mexican government to minimize the impact of imports on local prices.
Cabellero said Mexico has not indicated the quantity of beans which will be covered by the individual permit auctions; but he did say he believed the permits would only be valid for 90 days.
If that is the case, then mainly old crop beans will be shipped to Mexico and markets in the United States could find themselves facing more price pressure after harvest than in the past as other consumers know they will not need to compete with Mexico for available supplies.
Such timing allows the Mexican government to ensure imports do not interfere with the main spring and summer harvest. It also ensures imports are opened up during a period when domestic bean supplies are tightening.
Cabellero notes Mexico hopes to produce 890,000 MT of beans during the spring and summer cycle, compared to around 265,000 MT during the winter cycle.
He also expects the average price paid for import permits to trend down during the remaining years of the transition into free trade. The reason is prices paid for this years permits were remarkably close to the import duty rate which applies to over-quota beans. The duty rate is falling each year, and it is unreasonable to expect importers to pay a premium for permits.
Clancy is editor of STAT, a specialty crop marketing newsletter. Contacts are phone: (604) 535-8505; website: www.statpub.com; mailing address: PMB 803, 250 H St., Blaine, WA 98230