Gruma, S.A.B. (NYSE: GMK), the world’s leading flour manufacturer, affirmed today that its MX$2.8 billion (US$168 million) loss during the third quarter of 2008 was linked to losses on exchange rate derivative instruments, according to a report in El Economista. 

Gruma specified that the losses were caused by a 1,805% increase in the company’s cost of financing, which was “the result of unrealized losses on exchange rate derivative instruments representing a virtual fair market value loss of US$291 million.”  This loss sharply contrasts to Gruma’s profit of MX$799 million (US$76 million) for the third quarter of 2007. 

At the close of September 2008, the report said that Gruma’s total debt was US$772 million.  The company’s financial issues could have ripple effects world-wide: Gruma has 19,000 employees, 91 plants, and sells its products in 50 countries, including the U.S. Mexico, Venezuela, and Australia, as well as in Central America, Europe, and Asia.

President Felipe Calderon has signed into law a bill to ban the capture and export of Mexican wild parrots, according to a report by Defenders of Wildlife.

The report said that Mexico is home to 22 species of parrots and macaws, of which six are found nowhere else in the world, and that 90 pecent of Mexican parrots and macaws are in some manner at risk.

A surge of enforcement activity against undocumented farm workers by U.S. immigration officials is causing many U.S. agribusinesses to move operations to Mexico, where labor abounds, according to an article by Moises Ramirez of U.S. Citizenship and Immigration Services. 

The article said that Sonora, Baja California, Jalisco, Guanajuato, Queretaro, and Sinaloa were the Mexican states receiving the majority of the investment from U.S. agribusinesses, which include Bill Packer, Frank Capurro & Son, Sahara, Veg Packer, and Driscoll’s, among others. 

A farmer cited in the article said that the foreign investment was increasing land values.

The U.S. Food and Drug Administration (FDA) is still advising consumers to avoid raw jalapeño peppers and foods that contain them if they were grown, harvested, or packed in Mexico because of the threat of the rare Saintpaul type of Salmonella enterica.  Jalapeño and serrano peppers grown in the United States are not the culprit, according to the FDA.

To date, 1,307 people in the U.S. have been infected as a result of the outbreak.  The largest number of cases are in New Mexico and Texas, with 56.9 and 20.8 reported cases per million people, respectively. 

Jim Prevor of PerishablePundit.com argues that the FDA’s find of Salmonella in a single jalapeño pepper at McAllen, Texas produce importer Agricola Zaragoza, Inc. does not mean that the pepper or Agricola Zaragoza has anything to do with the outbreak.  The rationale: an Agricola Zaragoza worker could have become infected by an external source brought the contamination to the pepper at work.  Mr. Prevor believes “that the risk for healthy people of eating fresh jalapeños was always inconsequential and, at this date, is de minimus.”

As MLB reported in a July 26, 2008 post, Mexico has objected to the FDA’s labeling of Mexico as the source of the outbreak.

The Mexican government, through its National Service of Food and Agriculture Health and Quality (Servicio Nacional de Sanidad e Inocuidad y Calidad Agroalimentaria - SENASICA), sent a letter to the U.S. Food and Drug Administration (FDA) objecting to the FDA’s allegations that Mexican jalapenos are source of the U.S. salmonella outbreak, according to today’s El Financiero.  the Director of SENASICA, said that the U.S. has not shared evidence with Mexico proving Mexico is to blame for the outbreak.  If such evidence exists, which Mr. Cruz doubted, he that the FDA should specifically identify the source of the outbreak rather than pasting blame on the country of Mexico.  Lastly, he added that the source of the salmonella is probably somewhere in the U.S. distribution chain for the peppers.

Enrique Sánchez Cruz,

Mr. Cruz’s request for information sharing by the FDA seem reasonable.  However, the FDA was correct in first identifying the general source of the outbreak as Mexico if it did not have sufficient information to pinpoint the specific source.  As Mr. Cruz indicates, the FDA should now quickly attempt to identify the specific source.  U.S. and Mexican tomato producers would probably agree.