Commodities Buzz: USDA Estimates Mexico Sugar Production At 6.57 Million Tonnes For MY 2018/19

As per the latest release by United States Department of Agriculture (USDA) , Mexican sugar production for marketing year 2018/19 is forecast to be 6.57 million metric tons rawvalue (MMT-RV), although there is not yet an official forecast. Sugar production for MY 2017/18 is estimated at 6.4 MMT-RV, according to new estimates. The sugar export forecast for MY 2018/19 is 1.5 MMT-RV, although there is not yet an official forecast. Export estimates for MY 2017/18 are 1.49 MMT-RV, whereas exports to the United States are expected at 1.1 MMT-RV. Sugar exports were slow at first as the industry was having difficulties in producing the polarity needed in the United States.

There is not yet an official forecast for sugar exports MY 2018/19 as this will depend on sugar production and the needs of sugar under the new 2017 U.S./Mexico sugar agreement. However, the initial forecast is close to the previous marketing year or 1.5 MMT-RV. The Post/New sugar export forecast for MY 2017/18 is lower compared to previous estimates or 1.49 MMT-RV, based on official estimates. This export forecast is tentative and will tend to change depending on production, U.S. and international sugar and sweeteners (HFCS) prices, and exchange rates. Exports to the Unites States are expected at 1.1 MMT-RV. Sugar exports, however, were slow at the beginning of the cycle since this is the first year of the new 2017 agreement. Mills were having difficulties in producing the polarity needed in the United States. Based on the new 2017 U.S./Mexico sugar agreement amendments, Mexico is shipping 70 percent of sugar that has to be 99.2 polarity or less. The sugar agreement amendments reduce the percentage of refined sugar that may be imported into the United States from 53 percent to 30 percent. Since the mills have a quota to cover for export purposes, CONADESUCA believes the mills are negotiating sugar swaps between them to cover the polarity on sugar to be exported, as not all the mills can produce that specific type of sugar. Post/New sugar exports estimates for MY 2016/17 are adjusted downward, based on official data. Up to March 18, 2018, Mexico has exported under the Sugar Agreement with the United States 482,700 MT-RV from a total of exports of 598,785 MT-RV including IMMEX (Mexican Sugar Re-export Program) sugar.