Mexico plans to export more sugar to other countries than to the United States in the 2021-2022 cycle, according to projections by the Ministry of Agriculture.
In this season, it is estimated that Mexico will produce 6 million 167,000 tons, of which it will export 1 million 939,000. Of these foreign sales, 899,000 tons would go to the United States and the remaining 1,040,000 tons to other countries.
The United States represents the most profitable market for Mexican exports of this sweetener, because it maintains a kind of customs union with Mexico, as the customs of both nations charge high tariffs on sugar imports from third countries. In a report, the United States Department of Agriculture indicated that Mexico would export such an amount of sugar to other countries to meet the goal of the government program of maintaining ending stocks worth 2.5 months.
At the same time, the suspension agreements limit Mexico’s exports to the United States to the residual needs of the US market for domestic human use in a given business year after subtracting US production and imports from other countries.
In the last decade, only in another cycle, that of 2018-2019, Mexico exported more sugar to other countries than to the United States. In turn, the Mexican sugar production expected for this season would be the third largest in the last 10 years, surpassed by the 2012-2013 and 2018-2019 cycles.
Before 2008, Mexico provided a negligible share of sugar imports to the United States, but has since become the largest supplier to that market. Mexico’s growing contribution to the US sugar supply comes despite a cap placed on the country’s exports to the United States under the terms of suspension agreements negotiated with the US Department of Commerce in 2014.
Until 1993, US sugar imports from Mexico were limited to small portions allocated under the World Trade Organization (WTO) sugar quotas for the United States.
In 1994, the North American Free Trade Agreement (NAFTA) was implemented, and tariffs on sugar were phased out over a 15-year period in which additional Mexican sugar was periodically imported.
In July 2006, the United States and Mexico negotiated additional import quotas, and in 2008, sugar trade between the two countries became duty and quota free. This arrangement remains in effect under the United States-Mexico-Canada Agreement (USMCA) that replaced NAFTA in 2020.
From 2008 to 2013, without tariffs or quotas, Mexico’s share of total US imports grew considerably, peaking at 64% in 2013.
In 2014, both countries negotiated agreements that suspended US antidumping and countervailing duties that would have been applied to Mexican sugar. Since then, Mexico has limited its exports.