July 31 International Fertilizer and Agriculture News

Mexico’s Economy Beats Forecasts with 2.2% Second-Quarter Growth

Mexico’s economy grew by 2.2% in the second quarter of 2026, mainly supported by solid expansion in the agricultural sector and steady growth in industry and services.

Statistics agency Inegi reported that gross domestic product (GDP) growth accelerated from an annual growth rate of 0.2% in the first quarter. First-quarter data were revised up from 0.1%, reinforcing signs that the economy began accelerating in March.

Second-quarter performance followed annual growth of 1.7% in the fourth quarter of 2025 and a contraction of 0.2% in the third quarter of last year.

The primary sector, including agriculture, fishing, mining, and hydrocarbon extraction, grew by 7.6% in the second quarter, compared with a revised 0.4% increase in the first quarter, which had originally been forecast as a 0.1% contraction.

Industrial output, including manufacturing, construction, and mining, rose by 0.9%, after a 1.2% contraction in the first quarter, previously reported as a 1.3% decline. Services grew by 2.6% from April to June, up from 1% growth in the first quarter, which had been revised from 0.7%.

The annualized second-quarter performance exceeded Mexican bank Banorte’s 2.1% forecast and was well above its 1.6% market consensus expectation. Banorte said these “very positive” figures confirmed its forecast for 1.4% GDP growth in 2026, citing expected support from industrial and services activity.

Banorte expects investment to remain a key driver, focusing on major planned projects in retail and e-commerce, including Mercado Libre’s $4.6 billion investment in Mexico. It also expects construction to benefit from investment in government-supported hospitals, natural gas infrastructure, and renewable energy projects.

Banorte added that Mexico’s trade outlook remains optimistic despite the U.S. decision on July 1 not to renew the USMCA while negotiations continue. Fitch Ratings estimates that the latest U.S. tariffs related to forced labor measures will effectively reduce Mexico’s effective tariff rate from 5% to 3.7%.

Brazil Approves New Federal Natural Gas Sales Rules: Update

Brazil’s National Energy Policy Council (CNPE) approved a resolution on July 30 allowing federally owned natural gas to be sold directly into the liberalized market through auctions. The government said the move could reduce natural gas prices by more than 50% and improve industrial competitiveness.

The measure updates Brazil’s market policy for state-owned natural gas and authorizes state-owned commodity trading company PPSA to conduct short-term auctions from 2026 to 2030 and long-term auctions from 2030 onward.

The government said the gas will be offered on an economic and competitive basis, prioritizing gas-intensive industries such as chemicals, petrochemicals, fertilizers, and steelmaking.

The Ministry of Mines and Energy estimates that the price of state-owned natural gas could fall from around $12/MMBtu currently paid for gas commercialized by state-owned Petrobras to around $5/MMBtu, according to Minister Alexandre Silveira.

The resolution is part of Brazil’s “Gas for Jobs” program, which aims to increase domestic natural gas supply and improve competition in Brazil’s gas market. The government said studies by state-owned energy research company Epe show that the measure, together with ongoing regulatory actions by hydrocarbons regulator ANP, could bring BRL 95 billion ($17 billion) in investment and add BRL 79 billion to Brazil’s GDP.

The government also expects the policy to lower gas costs for thermal power generation and compressed natural gas transport.

Large energy consumers association Abrace also supports the rules, saying they will create a more competitive environment and provide mechanisms to lower natural gas prices for industry. Abrace also highlighted other progress made by ANP, such as broader access to key natural gas infrastructure, which will also help expand Brazil’s natural gas market.