A U.S. Grains Council (USGC) trade team of Mexican ethanol buyers traveled to the United States recently to learn how U.S. ethanol is produced and long-term purchasing strategies for the biofuel.

“This team was an interesting experience because the buyers were very knowledgable and asked in-depth questions,� said Jose Jimenez of Zeeland Farm Services. “From this team I become aware of both the short- and long-term opportunities we have with our southern neighbor.�

Reforms in Mexico’s energy policy are changing the picture for U.S. exports there, with Pemex’s monopoly to end in 2017 and gasoline and diesel prices to be no longer set by the government by 2018. This means that in a few years’ time, Pemex will need to be competitive in the international marketplace.

In March, Pemex announced its plan to introduce its first-ever blend of gasoline mixed with ethanol and has since awarded six contracts to local ethanol plants. Under Mexican law, these plants are prohibited from the domestic production of corn-based ethanol, but it is clear that domestic sugarcane production can only meet a portion of the ethanol fuel supply potential in Mexico. This could create a potential for U.S. exports of ethanol to the market, which will be tariff-free under the North American Free Trade Agreement (NAFTA).

However, U.S. ethanol exports to Mexico will only occur if the economics are favorable and the ethanol blender or gasoline distributor has an incentive to change the existing fuel distribution system in favor of using ethanol.

“We’re excited about the use of new energy fuels and are looking forward to creating a stronger bond between the U.S. and Mexican ethanol markets,� said Jorge Lerdo de Tejada of Grupo Baltico.

Click here to view more photos from this team.