In the April WASDE, USDA increased Mexico’s sugar production by 35,000 metric tons, to 5.235 MMT, and increased U.S. imports from Mexico by 34,000 short tons raw value, to 1.199 million STRV. USDA’s current estimate is realistic if Mexico’s sugarcane harvest stops in late May, when the rainy season typically starts. However, Mexico’s crush pace is slow this year as a result of numerous halts from heavier-than-usual rains during the campaign. If Mexico can extend the campaign into June and harvest and crush all available cane, then production could increase another 3 to 4 percent.
Domestic sugar consumption in Mexico is also a significant question as Mexico shelters its population and closes nonessential businesses. March demand was up nearly 100,000 MT versus March 2018/19. This rate is expected to slow down and perhaps decline, but Mexico could have less sugar available to export if pantry stocking and hoarding continues.
USDA currently estimates Mexico’s ending stocks at 936,000 MT, the minimum volume if Mexico were to want to keep stocks to cover 2.5 months of consumption during the transition into new-crop supply. If Mexico is comfortable with letting ending stocks fall to a two-month margin instead, the exportable surplus would increase further.
Mexico’s base export limit for exports to the United States is 1.46 million STRV based on 80 percent of U.S. import needs from Mexico of 1.827 million STRV in the December WASDE report, while USDA estimates 2019/20 imports from Mexico at 1.199 million STRV.