Insight – Low grain production in North America opens opportunities in Mexico for Australian grain exporters

There are opportunities for Australian grain exporters to capitalise on Mexican demand for canola, oats and sorghum.

Population growth and consumer preferences are driving Mexico’s long-term demand for grain.

Mexico’s demand has been further elevated in the short term due to lower than usual grain production. This follows unfavourable seasonal conditions in North America (Source: National Centres for Environmental Information 2021).

The Mexican government has a long-term goal of diversifying Mexico’s grain suppliers.

Implication for exporters

Australia’s bumper grain harvest means there may be capacity for Australian exporters to increase their share of Mexico’s canola, oats and sorghum imports.

Under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, Australia has tariff-free access to the Mexican market for these products.

Mexican demand for wheat is also elevated. Australia does not currently have access for wheat exports to Mexico. However, the Australian Government is working to secure access to this market.

Figure 1: Australian exports of canola, oats, sorghum and wheat



Mexico relies on domestic production and imports from Canada to meet local demand for canola. Drought conditions are expected to reduce the 2021–22 Canadian canola crop by 24% (Source: World Grain 2021). Canola exports are also expected to drop by 36% (Source: Canola Council of Canada 2021).

The United States Department of Agriculture (USDA) expects canola consumption in Mexico to increase by 3.9% in 2021. Increased demand, coupled with reduced Canadian supply, will encourage Mexican importers to seek other suppliers.


Mexico imports about two-thirds of oats it consumes. Between 2018 and 2020, Mexico imported an average of $30.1 million of oats.

The vast majority (97%) of Mexico’s oat imports are sourced from Canada. Ongoing drought in Canada’s oat-producing provinces is likely to decrease the volume and quality of its oat exports.


Drought conditions in the main sorghum-producing state of Tamaulpas will reduce Mexico’s 2021 sorghum harvest (Source: USDA 2021). Local production is expected to meet around 60% of Mexico’s sorghum demand.

Between 2018 and 2020, Mexico imported an average of $72.8 million of sorghum, entirely from the US (Source: TradeMap 2021). US sorghum production and exports are also expected to be drought affected this season.

The Mexican Agriculture Department’s 2017–2030 Sorghum Strategy identifies Australia as a potential supplier. This will enable Mexico to diversify its sorghum markets.


Between 2018 and 2020, Mexico imported an average $1 billion of wheat. The imports came mostly from the US and Canada (Source: TradeMap 2021). Mexican, US and Canadian production have all been drought affected.

The modernisation of Mexican mills is also expected to support demand for wheat imports. Mill modernisation has increased Mexico’s wheat-processing capacity to 9.4 million tonnes of wheat. However, only 6.6 million tonnes is being used (Source: USDA 2021). Mexican mills have the potential to process more wheat if product becomes available.

The Mexican Agriculture Department’s 2017–30 Wheat Strategy identified Australia as a potential future supplier of wheat. This will enable Mexico to diversify its wheat markets.

Australia does not currently have market access for wheat to Mexico. The Australian Government has provided a technical market access submission to Mexico’s biosecurity agency.


The Manual of Importing Country Requirements has import requirements for agricultural commodities to Mexico.

The Australian Government’s network of Agriculture Counsellors provided information for this article. More information about the Agriculture Counsellor network, including contact details, is available on the Department of Agriculture, Water and the Environment website.

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