Background on the Mexican Sugar Industry and Key Players
The Mexican sugar industry is a significant contributor to the country’s agroindustrial sector. The government recently implemented a 210% tariff on imported sugar from third countries to protect the domestic industry from cheap and uncertain-origin products flooding the market. This move comes amidst internal oversupply, depressed prices, and high inventory levels, which have squeezed the profit margins of sugar mills.
Recent Production and Export Trends
During the 2024/2025 sugar cycle, Mexico’s national production reached 4.77 million tonnes, a 1.4% increase from the previous cycle, driven by improved efficiency in sugar mills. The Grupo Consultor de Mercados Agrícolas (GCMA) projects that production will rise to 5.1 million tonnes in the 2025/2026 cycle, supported by more stable weather conditions and agricultural yield recovery.
In the 2024/2025 cycle, Mexico exported 1.32 million tonnes of sugar, with 417,000 tonnes going to the United States, 310,000 tonnes to the Industria Maquiladora en la Frontera (IMMEX) industry, and 591,000 tonnes to the global market. Despite robust external sales, the ending inventory stood at 1.12 million tonnes, indicating an oversupply that continues to weigh on domestic prices.
Mexico’s apparent consumption of sweeteners is estimated at 5.6 million tonnes, with 3.95 million tonnes being sugar and 1.6 million tonnes high fructose corn syrup.
Impact of Imported Corn Syrup and New IEPS
Juan Carlos Anaya, the director general of GCMA, highlighted that imported corn syrup imports surged by 19% between 2014 and 2025, displacing part of the domestic sugar consumption. Moreover, the newly approved differentiated IEPS (Impuesto Especial sobre Producción y Servicios) in the 2026 Economic Package, with a rate of 3.08 Mexican pesos per liter for high-calorie beverages and 1.5 pesos for low-calorie ones, could further diminish domestic sugar demand.
Government’s Protective Measures and Future Outlook
Anaya acknowledged that the 210% tariff is a necessary defensive action, though insufficient to stabilize the market. He emphasized the need to bolster the competitiveness of the cane sector, increase sugar exports to the United States, regulate corn syrup trade, and combat smuggling without causing inflationary pressures for the final consumer.
Key Questions and Answers
- What is the purpose of the 210% tariff on imported sugar? The Mexican government implemented this tariff to protect the domestic sugar industry from cheap and uncertain-origin products flooding the market, amidst internal oversupply, depressed prices, and high inventory levels.
- What are the recent trends in Mexico’s sugar production and exports? Mexico produced 4.77 million tonnes of sugar in the 2024/2025 cycle, a 1.4% increase from the previous cycle. The country exported 1.32 million tonnes of sugar, with significant portions going to the United States and the IMMEX industry. However, oversupply led to an ending inventory of 1.12 million tonnes.
- How have imported corn syrup and new IEPS affected the Mexican sugar market? Imported corn syrup imports have increased by 19% between 2014 and 2025, displacing part of domestic sugar consumption. The new differentiated IEPS on beverages could further reduce domestic sugar demand.
- What measures is the Mexican government taking to support the sugar sector? The government has imposed a 210% tariff on imported sugar and aims to enhance the competitiveness of the cane sector, increase sugar exports to the United States, regulate corn syrup trade, and combat smuggling without causing inflationary pressures.
