Insight Focus
- We think Mexico will produce under 5 million tonnes of sugar this season.
- This would be the lowest sugar production of the last 10 years.
- As a result, most Central American exports will go to Mexico.
Mexico Produces Less Than 5 Million Tonnes
The USDA recently revised Mexican sugar production down to 5m tonnes, but we think it is likely to drop even lower — to 4.7m tonnes due to poor cane and sucrose yields. Mexico is facing its lowest sugar production of the last 10 years. This would be a decrease of almost half a million tonnes compared to last year.
So far, Mexico’s sugar production is 15% below last year — a year that also saw a decrease in production. Mexico’s cane crush is also behind compared to the last two seasons.
The main reason we are seeing this drop in production is due to prolonged drought conditions, which means the amount of sugar per hectare is below average. So far, both agricultural and industrial yields are below the last two years, and we expect this to continue.
With lower sugar production, Mexico will have to import sugar, just like we saw last season.
Where Will Mexico Import Sugar from?
With smaller sugar production, Mexico will be looking for sugar from its neighbors to enable it to fulfill as much of its US quota as possible. Three out of the five countries that Mexico imported most of its sugar from in 2022/23 are in Central America.
This season, India isn’t exporting sugar to the world market. This means that Mexico is likely to be even more dependent on Central American supply than normal. Central American countries normally export around 3.3 million tonnes of sugar. This year, most will go to Mexico.
