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USDA estimates lower sugar production in Mexico

The United States Department of Agriculture (USDA) adjusted downward its estimate of sugar production in Mexico for the 2022-2023 season.

For that season, its production forecast is 6.16 million metric tons gross value (MMT-RV), a decrease of 5.7% compared to the previous cycle.

What explains the adjustment? There was inadequate rainfall during the critical growing season (mainly in August), higher input costs (especially fertilizer) and a labor shortage affecting crop quantity.

Also, higher transportation costs and lack of government assistance point to lower production in the 2022/23 season, according to USDA.

Mexico – Centrifugal Sugar PS&D

In addition, average fertilizer prices were 80% higher in May 2022 compared to the same month in 2021.

Sugarcane growers primarily use granular fertilizers, such as urea, and use smaller amounts of diammonium phosphate.

In general, the highest fertilizer demand and applications occur when the rains begin, between May and July.

Sugar production

Officials from the National Committee for the Sustainable Development of Sugarcane (CONADESUCA) report that there has been a labor shortage in the fields this year due to the high demand for labor from other agricultural sectors.

However, industry sources indicate that mills have not been affected by labor shortages due to the technical nature of mill work.

USDA forecasts 2022/23 planted acreage at 853,000 hectares, in line with last year’s estimate, and 2022/23 harvested acreage at 804,000 hectares.

On August 4, CONADESUCA released the latest weekly production report for the 2021/22 campaign, with final production of 6.56 MMT-RV, up 8.2% from the 2021/21 campaign.

The area harvested was 805,682 hectares, with 57.96 MMT-RV of cane harvested.

The largest production increases were observed in Veracruz with 13.5%, Oaxaca with 14.4% and San Luis Potosí with 6.6%.

In the 2021/22 season, sugarcane production in Mexico increased due to higher sugarcane sales prices, increased rainfall during the critical growing period, and an increase in planted areas.

 

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