Mexico Turns to Cheaper Russian Grain amid Trade Tensions with U.S.

Mexican bread and pastry producers are looking for alternative suppliers of wheat to reduce their dependence on the United States as trade relations between the two neighbors deteriorate, The Hill reports.

Mexico is the top importer of U.S. wheat, but the country is increasingly turning to cheaper supplies from Russia, which surpassed the United States as the top global wheat supplier in 2016, the report says.

Mexico is also searching for more alternative suppliers in Latin America and elsewhere to hedge against the risk that U.S. grains will get more expensive if the Mexican government imposes tariffs, according to Reuters.  

Canimolt, a Mexican trade group that represents 80 percent of Mexican milling companies, told the news agency that pre-emptively shifting import priorities away from U.S. suppliers is a way to send a “message” to President Trump over tariffs that many U.S. allies have denounced.

“It’s important to send signals to Mr. Trump,” Canimolt chief Jose Luis Fuente said, adding: “We can’t continue to have this absolute dependence” on the U.S.

U.S. wheat exports to Mexico dropped 38 percent in value, to $285 million, in the first five months of 2018. U.S. wheat exports to all countries, valued at $2.2 billion, dropped 21 percent.