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 Business News | December 2007 
Raw Sugar Costlier in Mexico
 Andres R. Martinez - Bloomberg News
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 |  | Mills are losing money on each kilo of sugar they sell.
- Juan Cortina |  | |
The price of raw sugar in Mexico has risen 12 percent since sugar-cane growers stopped deliveries to protest the lifting of import restrictions on sweeteners that sent domestic cane prices plunging.
Sugar traded in Mexico City's central market has risen as much $2.95 to $26.70 for 110 pounds since shipments were halted to processing plants Nov. 15, according to data on the Agriculture Ministry's Web site.
Mexico's 57 sugar mills haven't received any cane since growers began their protest, demanding a 10 percent premium for cane to make up for any drop in prices once the Mexican market opens to U.S. sugar on Jan. 1 as part of the North American Free Trade Agreement.
Even after the recent gains, raw sugar prices still are down 26 percent from a year earlier on speculation that a surplus of the sweetener in Mexico will reach 850,000 metric tons for the 2007-2008 crop.
The farmers' demand for higher prices is unreasonable, said Juan Cortina, president of Mexico's Sugar and Ethanol Chamber of Commerce.
Mills are losing money on each kilo of sugar they sell, he said.
Importers have been illegally bringing in U.S. sugar to Mexico, driving down the price of domestic sweetener, Cortina said, without saying where he got the information. The government is investigating reports of the contraband, he said.
Cortina said Mexico will soon start exporting surplus sugar and may begin turning sugar cane into ethanol by 2009. |
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