Last week, CONADESUCA (Mexico's National Commission for the Sustainable Development of Sugarcane) released its report for the 2024/25 crop in Mexico up to May 24. Up until that time, 16 of the country's 47 mills were still in operation, indicating a move towards the end of the crop.
Accumulated crushing reached 44.79 million tonnes, a slight drop of 0.92% compared to the same period in the previous crop. On the other hand, sugar production and productivity showed better results compared to the previous cycle. The result for sugar production was 4.69 million tonnes, which translates into an annual increase of 1.73%, while the TCH saw a slight increase of 0.21 t/ha, reaching 62.98 tonnes of cane per hectare. It is worth noting that in its revision at the beginning of May, StoneX came up with an estimate of 4.89 MMt (tel quel) for Mexico in the current cycle (+4% y/y).
Sugar production in Mexico (MMt)
*Estimate, in tel quel sugar. Source: StoneX and CONADESUCA.
The weather has been one of the main concerns for sugar production in Mexico in recent years. Between the 2018/19 and 2023/24 crops, productivity fell by 12.6%, from 70.94 tonnes of cane per hectare to 62.03 t/ha. The effect of the drought, especially from the 2023/24 crop onwards, brought production to the lowest in decades. So far, the 2024/25 crop has seen a year-on-year increase, but remains close to the previous year. The low volume of rainfall has also hampered the recovery of sugar from Mexican cane.
It is possible to see a drop in this indicator between the 2018/19 and 2024/25 crops if we calculate the amount of sugar produced in relation to the amount of cane crushed. In addition to the drought, the increase in production costs with higher fertilizer prices in the country has also impacted these factors.
Between March and May, rainfall in the main sugarcane-growing areas in Mexico was below average. Compared to last year, May saw an increase in rainfall, but it was still 2% below average. The months of March and April were more critical, with rainfall around 60% below average. It is worth noting that the most significant period of rainfall in the country, between June and September, will tend to set the tone for the following season.
According to StoneX estimates presented in the global sugar balance report, the Mexican crop is expected to end 2024/25 with a total sugar production of 4.9 million tonnes. For 2025/26, the outlook is for a slight increase in crushing (+1.3%) to reach 48 million tonnes, as well as an increase in sugar production which should exceed 5.0 million tonnes (tel quel), reaching 5.05 million tonnes of sugar (+3.1%). However, diplomatic obstacles with the US could have unexpected effects on the Mexican crop, given that the main destination for Mexican sugar exports is the US.
Daily recap
On Wednesday (04), the most liquid raw sugar contract in NY (SBN25) recorded its second-lowest price since the beginning of the year and ended the day 15 points down, at US¢16.75/lb (-0.89%). On Monday, the National Federation of Cooperative Sugar Factories Limited (NFCSF) released a projection of a 19% increase in Indian sugar production, which may have generated a bearish sentiment in the market. In addition, a more favorable scenario in Thailand may also have been a bearish factor for raw sugar.
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