The GCMA predicts a nearly 10% decline compared to the 2022-2023 harvest; due to lower production and high domestic demand, sugar imports would amount to 435,000 tons.
Sugar production for the 2023-2024 harvest will close at 4.7 million tons, a minimum level in at least the last 10 years, representing a 9.2% decrease compared to the previous year’s harvest (5.2 million tons). Additionally, this would mark two consecutive years of decline.
“The sugar production in Mexico during the 2023/2024 harvest is experiencing a significant decrease due to drought conditions affecting several regions of the country,” stated Juan Carlos Anaya, General Director of the Agricultural Markets Consulting Group (GCMA).
This situation has led to a significant increase in sugar prices in the domestic market.
In its latest report, it was reported that the progress of the current harvest shows a reduction of 9.16% from 5.224 million tons to 4.746, compared to the same period of the previous harvest.
“Currently, the price of a 50 kg sugar sack at wholesale markets reaches 1,222 pesos. This price represents a significant increase of 21.11% compared to the price observed a year ago, which was $1,009 per sack,” detailed Anaya.
According to data published by authorities, it is estimated that the initial inventory available for the current harvest is around 835,091 tons of sugar. However, due to lower production and high domestic demand, sugar imports for this harvest are expected to reach 435,000 tons.
Additionally, total exports during this harvest will be 615,335 tons, with estimated sales to IMMEX of 300,000 tons plus the quota granted according to the agreement disclosing the requirements for temporarily importing goods included in Annex I of the decree for the promotion of the manufacturing, maquiladora, and export services industry.
Anaya highlighted that Mexico’s projected exports will also be the lowest in 10 years. “These data reflect the significant impact that drought is having on sugar production in Mexico, which in turn is influencing prices in the national market. It is important to closely monitor the evolution of this situation and take measures to mitigate its effects on the sugar industry and the economy in general,” detailed GCMA.
It is important to note that the sugar industry in the USA has requested its government to limit Mexico’s exports to 500,000 to avoid sugar triangulation.
Currently, there are 45 sugar mills in operation. The last major harvest reported in Mexico was in 2018-2019, with exports to the United States exceeding one million tons, whereas currently, exports to the American market will be 615,335 tons. Total sugar consumption in the country is forecasted at 4.5 million tons.
pilar.martinez@eleconomista.mx