Mexican sugar exports to rise as domestic consumption shrinks

NEW YORK: Mexico's sugar exports are slated to jump over 30 percent in 2018-19 as health concerns curb domestic consumption, the US Department of Agriculture (USDA) said in an attache report published on its website on Monday.

Consumption in Mexico is expected to fall to 4.60 million tonnes raw value in the crop year that began Oct. 1, compared to 4.57 million in 2017-18 and 4.79 million in 2016-17, the report said.

The country became a major battleground in the war on sugar when it imposed a soda excise tax in 2014.

The USDA attache in Mexico City said in the Sept. 26 report it had lowered its demand forecast due to "consumer health concerns, a preference for less-caloric food products, and continued deterioration of purchasing power due to high inflation."

Mexican firms, including soda companies, are reformulating products to reduce their sugar content, the USDA report said.

That will likely force Mexico's sugar millers to turn to the world market. Mexico's exports of sugar are set to increase to 1.7 million tonnes in 2018-19 from 1.3 million the previous marketing year, the report said. The bulk of Mexico's exports typically goes to the United States.

In an effort to wean consumers off sugary drinks and curb the epidemics of obesity and diabetes, Mexico imposed a controversial peso-per-liter excise tax at the beginning of 2014. Mexicans get a fifth of their calories from sugary drinks, and 14 percent of the population has diabetes, according to a 2016 study by Dr. Kirsten Bibbins-Domingo, chair of the US Preventive Services Task Force.