MEXICO CITY, MEXICO — Mexico’s vegetable oil and oil meal sectors are expected to see slower growth in 2023-24 due to potential declines in consumer purchasing power, an economic slowdown and persistent inflation, according to a report from the Foreign Agricultural Service (FAS) of the US Department of Agriculture.

Oilseed crushing is expected to increase based on population growth and meal demand from growth in the livestock sector.

“Mexico remains dependent on imported oilseeds and oilseed products, primarily soybean from the United States and rapeseed from Canada,” the FAS said.

Overall oilseed production is forecast to increase to 328,000 tonnes, entirely due to an increase in soybean production. The planted area for soybeans in 2023-24 is expected to increase 20% to 160,000 hectares. Production is estimated at 225,000 tonnes.

Oilseed consumption is expected to increase slightly by 1.5%, primarily attributable to the growth in the livestock sector and stable population growth.

Oilseed imports are expected to increase 2% in 2023-24 to 8.3 million tonnes. Soy is the primary oilseed imported by Mexico (around 80% of the total volume imported) for crushing domestically. For 2023-24, Mexico's soybean imports are expected to increase about 1.6% from the previous year, to 6.6 million tonnes.

Total oil meal production is forecast to reach 6.1 million tonnes, an increase of approximately 2%, due to slightly greater oilseed imports and moderate oil meal demand growth from the livestock sector.

Oil meal imports are estimated to increase to 1.9 million tonnes on the expectation that international prices will be competitive, the FAS said. Meal imports represent 23% of Mexico’s total oil meal consumption, as in the last two years, reflecting higher domestic crushing capacity.

“Almost all of Mexico’s oil meal imports are soybean meal,” the FAS said. “With rising domestic livestock production, the demand for soymeal as a primary vegetable protein should grow further, requiring additional imports, assuming affordable international prices.”

Oil production is expected to increase by approximately 1.8% to 1.8 million tonnes, with consumption expected to reach 2.3 million tonnes.

Soybean oil dominates Mexico’s market and is expected to reach 61% market share, or 1.4 million tonnes, the FAS said.