Mexico Restores 1.1-Million-Tonne Sugar Export Quota to the United States

Export access rebuilt after four years of cuts

Mexico has recovered a 1.1-million-tonne quota for sugar exports to the United States, reversing a sharp contraction in bilateral trade. According to Fortuna y Poder and Diario Presente, the available volume had fallen over the previous four years from around 1 million tonnes to only 150,000 tonnes.

President Claudia Sheinbaum said the restored volume resulted from negotiations involving Mexico’s Economy Ministry, agricultural authorities and US officials. Cane producers, mill workers, industry representatives and officials from producing states including Veracruz, Colima, Tamaulipas and Morelos also participated in the discussions. The government did not specify when the new quota would begin to apply, Diario Presente reported.

Domestic surplus gains a larger outlet

Mexico produces more sugar than its domestic market consumes. The loss of access to the United States had therefore left additional supply at home and contributed to lower prices, according to Sheinbaum. Fortuna y Poder said the recovered export volume represents more than one-fifth of national production, making the US market an important outlet for the surplus.

Moving more than 1 million tonnes out of the domestic market could reduce pressure on wholesale prices and improve conditions across the supply chain. Cane growers gain a larger market for their crop, while processors and mill workers benefit from stronger demand for domestic output. The scale of the quota also means its commercial effect will depend on how quickly exporters can use it, a timetable the government has not yet disclosed.

Smuggling and mill viability remain concerns

The government is also tightening surveillance against sugar entering irregularly from Central America. Sheinbaum said agricultural authorities were working with customs offices in southern Mexico and the National Guard to curb smuggling and illegal cane exports. No results from these operations have yet been published, according to Diario Presente. Producers and workers have identified illicit inflows as another source of pressure on the national market.

Those pressures are visible at the San Pedro mill in Lerdo de Tejada, Veracruz, which closed amid financial difficulties. The company cited a lack of profitability, while sugar-sector representatives also linked its problems to smuggled sugar. Workers are to receive legally required severance payments. Authorities are considering three possible futures for the facility: administration by the Veracruz government, formation of a worker cooperative or acquisition by another private mill. Sheinbaum said the plant would have to operate on market terms without an exclusive federal subsidy, although growers could retain access to general support under the Production for Wellbeing programme. The federal government is continuing talks with workers as it seeks to preserve direct and indirect employment in the region.