The U.S. Department of Agriculture (USDA) projected that Mexican sugar exports to the U.S. market will fall 30.9% in the 2023-2024 season (October-September), to 799,000 short tons gross value.
To consider equivalency: one short ton equals 2,000 pounds. Gross value is a factor of 1.07 of refined value, according to USDA, except in the case of Mexican sugar, whose gross value is a factor of 1.06 of the actual weight of product shipped.
Sugar is one of the main raw materials used in the production of soft drinks. Also, as a substitute for sugar, bottling companies use High Fructose as a sweetener in their products.
Mexican sugar exports
Among the companies that export sugar to the United States are Grupo Azucarero México (GAM), Grupo Piasa, Grupo Beta San Miguel and Grupo Azucarero Zafra.
Mexican sugar exports increased from 968,000 short tons in the 2020-2021 season to 1 million 379,000 tons in the 2021-2022 season.
USDA estimates that foreign sales in the same direction totaled 1 million 156,000 tons in the 2022-2023 cycle.
Regulations
According to the general rules regarding the application of the customs provisions of the USMCA, published on June 30, 2020 in the Official Gazette of the Federation of Mexico, sugar originating in the United States is exempt from payment of the General Import Tax, provided that the imported products have a written declaration from the exporter, certifying that such sugar has not benefited from the «Sugar Reexport Program» of the United States.
Sugar imported into Mexico from the rest of the world is taxed at US$360 per ton.
On June 6, 2017, the governments of Mexico and the United States reached a new suspension agreement regulating Mexican sugar exports, leaving without effect the administrative reviews initiated by the U.S. government at the request of the U.S. «American Sugar Alliance».
This agreement avoided taxes on Mexican sugar imports into the United States and also resulted in Mexico determining that the maximum quota for exports of refined sugar to the United States will be 30% per cycle and not 53% as previously agreed.
As a result, Mexico publishes annual sugar export quotas.