Mexico City, Nov 14 - Mexican cane growers and millers expect sugar exports in 2008/09 to be more than 500,000 tonnes, mostly for the U.S. market, and said they have resolved a pay dispute that threatened to stall the start of the harvest.
Mexico will produce around 5.5 million tonnes of sugar in the upcoming season, unchanged from the 2007/08 sugar year which ended in October, industry officials said on Thursday.
Internal sugar consumption in the country is about 5 million tonnes, leaving the rest for exports.
Mexico, whose trade rules in sugar were loosened last year when the 1994 North American Free Trade Agreement went into full effect, exported around 700,000 tonnes of sugar in 2007/08, according to Rene Martinez, the director of the sugar industry chamber.
A surplus left over from the 2006/07 harvest accounted for the high level of exports, Martinez told Reuters in a telephone interview.
He said the 2008/09 harvest was on track to begin on time, despite an ongoing dispute between a handful of millers and farmers about the payment for last year's crop.
"There is nothing standing in the way now of a normal start to the harvest. Some millers have already started working," Martinez said.
The head of the cane farmers union Carlos Blackaller said farmers were negotiating pay deals with eight mills so that the harvest could start normally. He added that potential sugar shortfalls in the United States represented an opportunity for Mexico.
"We are helped by the exchange rate right now and we have the advantage that the United States expects to be short on inventories in the upcoming cycle," Blackaller said.
Mexico's peso has weakened in recent weeks, hit by the ongoing global financial crisis, making Mexican exports more attractive.