• Mexico can ship 1m tonnes sugar to the USA in 2019/20 under the USMC Agreement (+12% YOY).  
  • This is because American sugar production is no longer forecast at record levels for the coming season.
  • Cold weather in August has negatively affected American beet growth.

September WASDE Release

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  • Each September, Mexican access to the US sugar market is calculated to maintain US closing stocks at 13.5% after the domestic crop and quota imports are taken into account. 
  • Due to a reduction in the American crop forecasts, Mexican access has been revised up to meet the shortfall in supply. 
  • The early expectations were for the domestic crop to reach a record high, but this has now been revised down due to poor preliminary beet yields. 

US Domestic Production

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  • The total access granted to Mexico could be revised down as the crop progresses and if it recovers. 
  • However, 70% of the September Mexican shipment forecast is now guaranteed and cannot be taken away. 
  • Increased access to the US market means that Mexican producers will have less sugar to export to the world market. 

Mexican World Market Exposure Reduced 

  • Mexico has been consistently losing market access to the USA since the introduction of the Suspension Agreement in 2014/15.

Mexican Exports to the USA

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  • This has meant that Mexico has had to export sugar to the world market to balance domestic stocks, exporting over 1m tonnes last season.  
  • However, the world market volume is set to decrease as more sugar can be shipped north of the border into the USA.

Vincent O’Rourke

Vincent began his career at CZ in 2016 as an analyst in the London Office, focusing on raw sugar flows and the Refineries in North Africa and the Middle East. Since 2019 Vincent has moved to the Miami office, leading the Americas analysis (excluding Brazil) and implementing the new data capture and database processes. Vincent graduated from Edinburgh with a master’s in theology in 2015 and completed a Masters in Emerging Economies from King’s London University in 2016

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