Mexico Sugar Exports to US May Double in 2008/09

Mexico could export up to 1 million tonnes of sugar to the United States in the 2008/09 season, nearly double the amount sent in the previous cycle, the head of sugar industry chamber said on Thursday.

Juan Cortina told Reuters in an interview Mexico would export between 700,000 and 1 million tonnes of sugar compared to just over 500,000 tonnes in 2007/08, as the country takes advantage of high inventories, a free trade deal and tightening U.S. supplies.

The U.S. sugar situation tightened last month as production in the top cane growing area of Florida fell, meaning the United States will likely have a shortfall that Mexican producers can fill, Cortina said.

"There is a huge need for sugar in the United States," Cortina said.

Mexican production outpaced demand and warehouses have more sugar than national consumption, meaning more sugar available to send north.

Just in the first three months of the harvest year, which began in October, Mexico exported 10 times more sugar than in the same period in 2007, Cortina said.

Trade rules between Mexico, the United States and Canada were loosened last year when the 1994 North American Free Trade Agreement came into full effect. Also helping exports, Mexico's peso has lost about a third of its value since last August, hit by the global financial crisis, making Mexican goods sold abroad more attractive.

Cortina also said Mexico would harvest 5.3 million tonnes of sugar in 2008/09, slightly lowering the chamber's previous crop estimate.

source: reuters