Mexico not buying U.S. yellow corn as GM ban looms, Lopez Obrador says

© Reuters. FILE PHOTO: Mexican President Andres Manuel Lopez Obrador gestures during a news conference after nearly 92% of voters backed him to stay in office in a recall election with a low turnout, according to results from Mexico's electoral institute, at the Nat

MEXICO CITY (Reuters) - Mexico's government cannot make purchases of yellow corn from the United States because it does not want genetically modified (GM) corn, President Andres Manuel Lopez Obrador said on Wednesday, amid pressure from its top trade partner over the future of the imports.

The United States wanted to sell Mexico more yellow corn and Mexico declined, Lopez Obrador said in a regular news conference.

"There is a market for it, but the government cannot make a purchase because we do not want GM," Lopez Obrador said, citing a lack of scientific investigation into its effects.

"We are a sovereign free country," he added.

Mexico has a controversial presidential decree that seeks to ban genetically modified corn in 2024 and phase out the herbicide glyphosate, found in Roundup.

Like most countries, the overwhelming amount of corn purchases in Mexico are made by private companies, including major commodities traders like Cargill and Bunge (NYSE:BG).

Lopez Obrador did not specify who made the request to sell more corn, the amount of the requested sale or the time frame.

The Mexican Ministry of Agriculture and a spokesman for the president declined to comment when asked for details.

Mexico is ready to halve its U.S. imports of yellow corn when the decree goes into effect and is considering direct agreements with farmers to secure non-GM yellow corn imports, the country's deputy agriculture minister said in October.

Mexico is mostly self-sufficient in white corn, used to make the country's staple tortillas, but has for decades imported huge quantities of yellow corn, mostly from U.S. suppliers, for its massive livestock industry as well as the production of industrial foods like cereals and sauces.

The country imports some 17 million tonnes of U.S. corn a year and is on track to import even more this year, experts have said. U.S. farm lobbies insist the ban will cause billions of dollars in economic damage.

Chicago Board of Trade corn futures fell on Wednesday after the news, with the benchmark December contract down 6 cents a bushel at a two-month low of $6.61-1/2 a bushel.

The U.S. Department of Agriculture did not immediately respond to a request for comment.

U.S. Trade Representative Katherine Tai discussed differences with Mexico over its energy sector and U.S. corn exports in a virtual meeting this month, underlining "the importance of avoiding a disruption in U.S. corn exports."

U.S. Agriculture Secretary Tom Vilsack has called for clarity on Mexico's GM corn ban, saying the United States could use the USMCA trade pact to challenge Mexico's policies if necessary.