Mexico City, Dec. 5 - The Mexican confederation of corn producers has signed an agreement for a strategic alliance with corn flour and tortilla maker Gruma, company and industry officials said Wednesday.
Gruma will seek to buy increasing volumes of its current annual corn purchases for the Mexican market directly from both small and large producers in regions closer to its manufacturing plants, officials said.
Roberto Gonzalez, Gruma's director general, told a press conference that the company currently buys about 40% of its annual demand of approximately 1.6 million metric tons of white corn directly from producers.
Gonzalez said Gruma wants to increase that percentage so as much of the company's entire local demand as possible is bought directly from producers, increasing the corn growers profits.
This increased production in regions closer to Gruma's 18 processing plants for tortillas will come primarily from producers as they increase yields, and the producers also may add new areas for planting, he said.
Corn industry officials said corn producers can increase their purchasing price by as much as between 30% and 50% by selling directly to the company rather than going through middle men who take a cut in the profits.
Efrain Garcia, president of the National Confederation of Mexican Corn Producers, said the new pact, in which Gruma would help producers raise average yields to become more efficient, is an example of companies and producers working together to confront market challenges.
With the North American Free Trade Agreement set to take full effect for the agricultural market Jan. 1, Mexican producers have expressed concern about competition from more cost-efficient U.S. corn producers.