Mexico's sugar exports to the US saw a record increase, but the market remains limited
Key Points
- Mexico's sugar exports to the US are expected to increase by 512 percent in the 2026/2027 period compared to the previous year.
- The volume of 1 million 152 thousand tons allowed by the US is projected to generate a revenue of 4 billion 760 million pesos for approximately 170 thousand producers.
- Trade is strictly limited by a quota system based on the US's own supply and inventory calculations.
- Under the agreement, at least 70 percent of exports must be unrefined sugar, which limits Mexico's ability to achieve high profits.
By the Numbers
Banamex analyst Rodolfo Ostolaza stated that Mexico's sugar exports will increase by 512 percent in the 2026/2027 trade period, providing relief to producers. The US will allow the import of 1 million 152 thousand tons of sugar from Mexico during this period. This situation means a potential revenue of 4 billion 760 million pesos for approximately 170 thousand sugarcane producers.
However, Ostolaza emphasized that despite this positive development, the structural problems of the sector have not changed. Sugar trade between the two countries has been conducted since 2014 through a quota and minimum price system based on US domestic needs. Therefore, Mexico cannot determine the volume it will export itself and cannot capture the highest value obtained from the product.
The analyst reminded that before 2014, under the North American Free Trade Agreement (NAFTA), Mexican sugar could enter the US market without restrictions and reached 1.8 million tons in the 2013/14 period. However, with the new regime implemented, Mexico fell into a "residual tolling" position, meeting the excess needs of the US. In addition, the obligation for at least 70 percent of the exports to consist of unrefined sugar prevents Mexican producers from achieving higher profit margins.
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Frequently Asked Questions
- How much will Mexico's sugar export to the US be for the 2026/2027 period?
- The US will allow the import of 1 million 152 thousand tons of sugar from Mexico in the 2026/2027 trade period. This figure represents a 512 percent increase compared to the previous period.
- Why does the Banamex analyst consider this export increase to be limited?
- Because Mexico cannot determine the amount of sugar it can sell on its own. The export volume is based on a formula calculated according to the US's own production and stock situation. In addition, the obligation for at least 70 percent of the exports to be unrefined prevents value-added sales.
- How did the sugar trade between Mexico and the US work before 2014?
- During the North American Free Trade Agreement (NAFTA) period, Mexican sugar could enter the US market without any restrictions, and exports reached up to 1.8 million tons in the 2013/2014 period. However, quotas were introduced following a trade dispute initiated by US producers.
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