Australian beef products suitable for taco or fajita type meals could begin returning to Mexico in higher volumes this year after the Central American country confirmed it will drop tariffs as it tries to take the heat out of domestic beef prices.

As Beef Central reported last week Mexico has published notice of a 200,000 tonne duty-free quota for chilled and frozen muscle cuts originating from countries that have no free-trade agreement with Mexico.

Beef prices in Mexico have risen by 55 percent since December 2011.

The Mexican Ministry of Economy has stated that new duty-free 200,000t quota is intended to bring more competition to the Mexican beef market and stabilise prices.

In 2016 Mexico imported 180,000t of beef, almost exclusively from the United States and Canada, which enjoy duty-free access through North American Free Trade Agreement (NAFTA).

Beef imports from countries without preferential free-trade agreement access, which includes Australia and New Zealand, are subject to tariffs of 20pc (chilled) to 25pc (frozen).

The non-tariff quota is in place until December 31, 2017.

According to US Meat Export Federation Figures, the US captured 84.6 percent of Mexico’s imported beef market last year, up from 82.6 percent in 2015. Canada’s market share was 8.9 percent last year, down from 10.5 percent in 2015.

Other importers to Mexico last year included Nicaragua with 4.5pc (up from 3.4 percent in 2015), with the remaining 2pc shared between Australia, New Zealand, Chile, Panama, Costa Rica and Uruguay.

Mexico has free trade agreements with most of those suppliers, except for Australia and New Zealand. Beef from other major South American suppliers – Brazil, Argentina and Paraguay – is not eligible for Mexico, due to foot-and-mouth disease-related restrictions.

In a circular to its exporting members earlier this month, the USMEF said big changes in existing market share in Mexico seem unlikely:

“Because of the eligible supplier situation, the fact that Mexico already has free trade agreements with most of its eligible suppliers and other market conditions (including tight supplies in Australia), USMEF does not expect to see a significant shift in imported beef market share as a result of Mexico’s duty-free quota. Its publication, however, reiterates the desire of the Mexican government to attract additional suppliers to the market.”

An Australian-based beef exporter told Beef Central this week that incremental increases in Australian beef export volumes to Mexico should occur in the next six to 12 months.

Australia held about 15pc of the Mexican beef import market prior to the implementation of NAFTA, which gave preferential duty-free access to Canada and the US.

Since then Australian export volumes to Mexico have declined dramatically to less than 1000t per year.

The Australian exporter noted that Mexicans are strong beef eaters (consuming about 30kg per person per year on average) and are now clearly looking at other supply options apart from the USA, as tensions between the two countries continue to build under the Trump administration.

Exports of Australian beef products suitable for use in taco and fajita meals like beef lips, thick/thin, inside skirts, flapmeat, and round cuts (knuckles, silversides, topsides) that all went in volume from Australia to Mexico pre-NAFTA are now likely to increase in the next 12 months, he said.

The Department of Agriculture told Beef Central that there are currently more than 50 beef establishments in Australia registered to export to Mexico.

Will Australian beef be competitive on price in the market? That is yet to be seen, but clearly it will be much easier to sell Australian beef to Mexico without the price-inflating burden of a 20-25pc tariff, that competitors do not also face.

Mexico was the world’s 10th largest beef exporter in 2016, exporting 255,000t, mostly to the US and also some product to Japan.