Park City, Utah, Aug 4 - Mexico should take advantage of shortfalls in the U.S. sugar market but deficits in its own sugar production will force it to import this season, its industry officials said on Tuesday.
Mario Bolivar, director of Czarnikow Sugar Mexico, said in a speech at the annual meeting of the American Sugar Alliance that U.S. sugar output has slipped at a time when consumption is growing.
The North American Free Trade agreement "gives Mexico the opportunity to...capture the U.S. (sugar market) deficit," said Bolivar.
The problem in the 2009/10 marketing year (August/July) is that Mexico will not be able to match its performance in the preceding season when it exported 1.18 million tonnes of raw sugar, largely to meet a shortage in the United States.
The U.S. Agriculture Department's monthly supply/demand report said surplus stocks in Mexico are down to 420,000 tonnes and this would limit their exports to 150,000 tonnes in 2009/10.
But U.S. sugar industry officials are apprehensive that Mexico will resort to sugar imports from the world market and then re-export part of the sugar to the U.S. to take advantage of higher prices in the American market.
Bolivar and Jose Pinto, chair of Beta san Miguel, said at the ASA meeting that estimated imports of around 400,000 tonnes would go only to the Mexican and not the U.S. market.
Pinto said Mexico's sugar output was hurt by drought and a lack of fertilization in farms.
USDA forecast Mexico's 2008/09 sugar output at 5.26 million tonnes, down from 5.7 million in 2007/08. Production in 2009/10 is seen by the USDA recovering modestly to 5.5 million tonnes.
"We are not seeing a big recovery," said Bolivar.
The Czarnikow official said they expect Mexico sugar imports to come in through tranches of 50,000 tonnes each "until they see the (Mexican sugar) market does not need" more supplies of the sweetener.
Pinto believes the first 100,000 tonnes of the sugar should "arrive before mid-September."
Bolivar said the "main chunk" of any imported sugar will come from Colombia, Guatemala, Central America and possibly Brazil."