Thursday March 12, 2020

In the USMCA region: Mexican sugar production through March 7th has totaled 2.800 million tonnes tel quel, 680,305 tonnes lower than last year’s production through the same date. Sugar production in the most recent week was relatively healthy at 254,889 tonne, down 20,186 tonnes (7.34 %) compared to last year. Area harvested during the week, however, was 25.56 % higher than last year, and the cane crush was just 0.3 % higher as yields remain the main drag on output.

The composition of Mexico’s production has become a focal point. Through March 7th, 339,631 tonnes of sugar pol’ing under 99.2 degrees (“other sugars”) have been produced while 790,523 of refinada and 1.710 million tonnes of estandar have been produced.

Scenario 1). At the full likely Export Limit of 1.933 million short tons, Mexico would have access of 1.143 million tons of “other sugars,” 489,900 tons of “restricted” refined sugar and 300,000 tons of “unrestricted” refined sugar based on the two Export Limit increases previously announced. The export of the 489,900 tons of “restricted” refined is contingent on the export of the 1.143 million tons of “other sugars.” If only half of the “other sugars” are shipped, only half of the “restricted” refined sugar can be shipped.

Scenario 2). If the Export Limit is reduced to 1.500 million tons, Mexico would have access of 840,000 tons of “other sugars,” 360,000 tons of “restricted” refined sugar and 300,000 tons of “unrestricted” refined sugar based on the two Export Limit increases previously announced. Again, “restricted” refined exports will be contingent of “other sugar” exports.

Scenario 3). If the Export Limit is reduced to 1.100 million tons, Mexico would have access of 560,000 tons of “other sugars,” 240,000 tons of “restricted” refined sugar and 300,000 tons of “unrestricted” refined sugar based on the two Export Limit increases previously announced. Again, “restricted” refined exports will be contingent of “other sugar” exports.

Mexico has only produced 339,631 tonnes of “other sugars” through March 7th, 16.8 % less than last year at the same date. The 2018-19 crop saw a total of 784,054 tonnes of “other sugars” produced. It appears likely that Mexico’s ability to export its full complement of “other sugars” may be the real bottleneck in terms of total exports. Scenario 1 above appears wholly unrealistic from every angle; Scenario 2 looks possible but improbable; and Scenario 3 looks quite manageable. Official consultations between the DOC and the Mexican Government should begin today if they have not already – Mexico should have a response on its ability to fulfill its Export Limit within 10 days.

Regards,

JSG Commodities This email address is being protected from spambots. You need JavaScript enabled to view it.
(203) 853 3000

This report has been compiled for general informational purposes only. While efforts have been made to ensure accuracy, Jenkins Sugar Group, Inc. assumes no responsibility for errors and omissions.