Record avocado production and exports, 2012-2013

 Updates to Geo-Mexico  Comments Off on Record avocado production and exports, 2012-2013
Nov 112013
 

Mexico is the world’s largest producer and exporter of avocados. In the 2012/13 season, Mexico’s avocado orchards produced a record 1.3 million metric tons of avocados. More than 90% of Mexico’s avocados are grown in the state of Michoacán, where about 12% of all agricultural land is currently under avocado orchards.

Avocado-growing states in Mexico.

Avocado-growing states in Mexico

Avocado exports rose 33% to 643,000 metric tons, worth 1.2 billion dollars, also a new record. The main export market remains the USA which imported 518,000 metric tons between July 2012 and June 2013, to help satisfy a demand that has risen rapidly.

Total USA avocado imports in 2012-2013 from all countries were 40% higher than the previous year, and have risen over the past 15 years from 200,000 metric tons to 750,000 metric tons.

In 2012-2013, Mexico also exported 125,000 metric tons of avocados to Canada, Japan, Central America and Europe, a 32% increase over the year before.

The Federal Farming Secretariat has introduced a new national certification system for growers to help ensure consistent quality and reduce spoilage during transport. Many avocado growers are working towards increasing the number of orchards certified by Global Gap, a worldwide certification organization.

avocado-marketingRelated posts:

Geo-Mexico has many other agriculture-related posts (easily found via our tag system). They include posts about the geography of growing/producing Christmas trees, cacao, honey, sugarcane, coffee, chiles, floriculture, tomatoes, tequila, horticultural crops and oranges. Enjoy!

Decision about GM corn in Mexico postponed until 2013

 Mexico's geography in the Press  Comments Off on Decision about GM corn in Mexico postponed until 2013
Dec 012012
 

Mexico’s new president Enrique Peña Nieto took office earlier today. His single, six-year term will end in 2018. The change of government means that a final decision about the commercial planting of genetically modified (GM) corn in Mexico has been postponed until sometime early next year.

As we have seen in several previous posts, GM corn is a hotly disputed topic in Mexico.

Corn poster

“Without corn there is no nation” (Conference poster, Autonomous University of Chihuahua)

Proponents argue that GM corn will lead to higher yields and reduce losses from pests and diseases. In their view, the commercial planting of GM corn in Mexico is inevitable and will help Mexico “catch up” with Brazil and Argentina, where GM crops are already being grown.  Opponents argue that GM corn will inevitably reduce the genetic diversity of corn, meaning that corn will have less resilience in future to unexpected (and unpredicted) changes (climate, pests, soil conditions, etc). They also argue that GM corn will make corn growers even more dependent on commercial seed producers.

US farmers have found that GM corn lives up to its advertised higher yields and disease resistance. Farmers organizations in northern Mexico have come out in public support of this view, though many farmers in the center and south of the country remain vehemently opposed to GM corn on the basis that cross-contamination would deplete the plants’ gene pool, and possibly lead to the eventual extinction of traditional corn varieties.

Mexico was the world’s 6th largest grain producer in 2010, but fell to 8th spot in 2011. In just 20 years, Mexico has gone from a nation that needed to import less than 400,000 metric tons of corn a year in order to satisfy its domestic market to one where, in the 2012-12 season, it will need to import about 11,000,000 tons. Mexico’s corn imports, mainly of yellow corn for animal feed, are expected to rise to 15,000,000 tons by 2020. Corn prices are also likely to rise since an increasing portion of the annual US corn crop is  destined for biofuel production rather than human consumption.

Mexico currently produces about 22 million metric tons of corn (mainly white corn for human consumption) from 7.2 million hectares nationwide. According to press reports, there are five applications for planting GM corn on a commercial scale. The total area involved is 2.5 million hectares (6.2 million acres).

  • The transnational seed firm Monsanto has two proposals, each for 700,000 hectares, in Sinaloa, Mexico’s leading corn-producing state
  • Pioneer Hi-Bred International (currently owned by DuPont) has submitted three applications, each for around 350,000 hectares, in Tamaulipas
  • Dow Agrosciences (a unit of Dow Chemical) has applied to grow GM corn on 40,000 hectares, also in Tamaulipas.

It is widely believed that the new government will approve the large-scale trials of GM corn that the companies are requesting. It is likely, however, that GM corn will be confined to certain areas of Mexico only, with other areas designated “centers of origin” for corn where cultivation of GM seeds would not be permitted.

Among the most vocal opponents to the plans for GM corn is the ETC (Action Group on Erosion, Technology and Concentration) group. They set out their views in a multi-page news release. Verónica Villa, of ETC’s Mexico Office, says that,

“If Mexico’s government allows this crime of historic significance to happen, GMOs will soon be in the food of the entire Mexican population, and genetic contamination of Mexican peasant varieties will be inevitable. We are talking about damaging more than 7,000 years of indigenous and peasant work that created maize – one of the world’s three most widely eaten crops.”

Geo-Mexico will continue to report on this issue as it develops in coming months.

Want to learn more? This short open letter from the Unión de Científicos Comprometidos con la Sociedad (Union of Socially-Committed Scientists)  ~ Call to action vs the planting of GMO corn in open field situations in Mexico ~ has an extensive bibliography.

Related posts:

The geography of tequila: trends and issues

 Other  Comments Off on The geography of tequila: trends and issues
Sep 152012
 

The production and export of tequila has been one of Mexico’s major agro-industrial success stories of recent times. In this post, we look at some of the related trends and issues.

Rapid rise in production

For the period 2009-2011, Mexico produced about 250 million liters of tequila a year. Of this total, 60% was “100% agave tequila“, where all the sugars are directly derived from the Agave tequilana weber azul, and the remaining 40% was “mixed tequila” (tequila mixto) where at least 51% of the sugars are from Agave tequilana weber azul, but the remaining sugars come from other non-agave sources.

Tequila production, 1995-2011. Data: Tequila Regulatory Council.

Tequila production, 1995-2011. Data: Tequila Regulatory Council.

This is a dramatic increase compared to the period 2001-2003, when the average production was about 140 million liters a year. During that period, 100% agave tequila contributed only about 20% of the total. The relative importance of 100% agave tequila has clearly increased very rapidly in the past decade.

Agave supply: from shortage to glut

While there is a clear upward trend in total production, there are periods where production has fallen, most recently from 2008 to 2009, when production fell by 60 million liters. One of the possible reasons for a short-term blip in tequila production is if there is a shortage of agave. Agaves take about 10 years to mature, so there is a lengthy time lag between planting and the first harvest of newly planted areas.

As demand for tequila has risen, some of the major producers have experienced temporary shortfalls and been unable to source as much agave as they would have liked. One of the consequences was that independent agave producers entered the market, seeking to profit from such periods. Such independent producers could do well, provided they were able to predict agave shortages a decade in advance. During the 1990s, hillsides all over Jalisco were planted with agave, many for the first time, providing a significant boost to agave supply a decade later.

Not all independents came out of this on top. The supply of agave now exceeds demand. Many of the major tequila companies have increased their own acreage of agave, or have signed forward-looking contracts with major independent growers in other areas of the designation of origin zone. Many independent agave farmers are losing out; they planted agave a decade ago, but failed to forecast the current glut.

Tequila makers currently consume about 1 million metric tons of agave a year. The Agriculture Secretariat estimates that there are about 20,000 independent growers who have no contracts, and 223 million agave plants of diverse ages for which there is no current or short-term market. As many as 30 million agave plants were considered “very mature” in 2009 and a total loss in 2010. It is likely to be several years before the production of agave falls back to a level sustainable with demand.

Exports continue to rise

Tequila exports have risen very rapidly since 2001, with only minor anomalies along the way. Mexico currently exports about 160 million liters a year. Tequila exports have performed well despite the now lengthy economic woes being experienced by the major importing countries.

Foreign ownership

Mexico’s tequila makers have undergone a similar experience to the country’s major brewing companies, in that all but one of the major tequila firms are now owned by foreign corporations. A proposed deal in which the last of the big Mexican tequila companies, José Cuervo, would also have been taken over by British firm Diageo (which owns Baileys, Johnnie Walker, J&B, Smirnoff, Captain Morgan and Guinness) was called off in December 2012.

Environmental concern

The major environmental problem associated with tequila making is wastewater. For every liter of tequila, 10 liters of wastewater (vinazas) are produced. The vinazas are nitrogen-rich, and contain high concentrations of chemicals, including heavy metals and salt.

The National Chamber of the Tequila Industry recognizes that only about 60% of vinazas are disposed of properly. Most of the remaining 40% (about 2.5 billion liters in 2008) are thought to be pumped untreated into local streams and ponds, damaging the ecosystem and destroying stream life.

The Mexican government fines distilleries that do not have adequate treatment plants for the vinazas they produce, but in the past many companies have opted to pay the fines rather than solve the problem at source.

The vinazas problem was one of the reasons why UNESCO recently considered revoking the Tequila region’s World Heritage status, awarded in 2006. Another issue that made UNESCO unhappy was a recent decision to locate a landfill site in Amatitán in the center of the World Heritage zone. In the end, UNESCO officials agreed that progress was being made; the area kept its heritage status.

There is hope on the horizon. A new cost-effective option for tequila firms seeking to dispose of viñazas has been developed by a local corporation Tecnología Nacional de Aguas. Called Proshiemex, it uses the viñazas to produce methane-rich biogas which can contribute to heating the boilers of the tequila distilleries. The remaining sludge can be easily treated in accordance with all applicable environmental norms.

Source of data:

  • Tequila Regulatory Council Statistics

Related posts:

Jun 112012
 

Avocados originated in Mexico and the country remains the world’s leading producer. Farmers in Michoacán (where 92% of Mexico’s avocados are grown) harvested 1.1 million tons of avocados in the 2010-2011 harvest season, 40% of the world total. About 125,000 hectares, or 11.5% of all agricultural land in Michoacán, is currently under avocado orchards.

Avocado-growing states in Mexico.

Avocado-growing states in Mexico

The value of avocado exports has tripled over the past five years. Exports in 2011 totaled almost 400,000 metric tons and were worth 990 million dollars, compared to 338 million dollars in 2006. The main export markets are the USA (80%), Japan (9%) and Canada (6%).

Part of the reason for strong exports is due to an increased demand from US consumers but it is also due to new menus in fast food chains. The addition of avocados in 2010-11 to the menus of Burger King and Subway restaurants has since been followed by competitors such as Wendy’s, so US demand for avocados should continue to grow.

Avocado growing has not been entirely plain sailing in recent years. Growers organizations have reported that costs of the inputs of water, fertilizers and electricity required for avocado growing have all risen sharply.

Avocado growers are also having to confront a relatively new challenge that increases the cost of doing business. According to an article in Mexico City daily La Jornada, growers are now being forced to pay “protection money” to criminal gangs operating in Michoacan’s avocado-growing zone.

The article claims that avocado producers in 13 municipalities in the state of Michoacán face almost daily demands for “protection” payments if they are to continue farming and avoid kidnappings and other forms of violence. It goes on to say that many smaller growers near Uruapan, Zitácuaro and Ziracuarétiro have chosen to rent out or sell their avocado orchards and move away from the area entirely.

In addition, one of the criminal groups is demanding up to $1,000 pesos (75 dollars) a plant for every avocado plant purchased from specialist nurseries. Several different groups are alleged to be involved. Avocado packers and truck drivers are also made to pay “fees” which can amount to between 40% and 60% of their normal income, according to anonymous representatives of national organizations speaking to the press.

The situation affects avocado growers in many places, including Los Reyes, Uruapan, Salvador Escalante, Acuitzio, Tacámbaro, Ario, Teretán, Apatzingán, Tacíntaro, Nuevo Parangaricutiro, Peribán, Tingüindín and Zitácuaro.

At one time, there were as many as 22,000 avocado growers, half of them working only small orchards. The protection rackets have meant that new plantings have become the preserve of a relatively small number of larger farms, and it is currently estimated that the total number of growers has shrunk to around 17,500.

Related posts:

Can Mexico’s decline in cacao production be reversed?

 Other  Comments Off on Can Mexico’s decline in cacao production be reversed?
Feb 162012
 

In a previous post, we looked at The geography of cacao production in Mexico. and saw how the area under cultivation and production have both fallen sharply since 2003. This post examines two recent projects that aim to reverse this recent trend of a steep decline in Mexico’s cacao production.

Major organic cacao project

The Agriculture Secretariat (Sagarpa) has several projects designed to rejuvenate Mexico’s cacao-growing sector. These include the production of young plants of high-yielding varieties, primarily in Tabasco for use in several southern states. Propagation method is either via grafting or via cuttings. (Tabasco is a leading centre for the development of tropical crops such as cacao, coconut palm and oil palm.)

In addition, Sagarpa is introducing improved methods of cultivation, harvesting and processing. The Secretariat is supporting a multi-phase plan to turn Mexico into the leading producer of organic cacao in the Americas. In the early phases, Maya Biosana will plant one million cacao trees to create 500 hectares (1200 acres) of irrigated orchards in 12 communities near Chetumal in Quintana Roo. The plan is to follow-up with similar numbers of new trees on additional land annually for another three years. The trees are expected to yield 2.4 metric tons of cacao per hectare (destined for high quality chocolates) and provide up to 2,000 additional jobs. [Note that the project is not without its critics, and we intend to write more about this in a future post].

NGO support for cacao producer cooperatives in Tabasco

One specific example of a project helping cacao farmers is the Chontalpa Cacao Presidium, a project initiated by the Slow Food Foundation. Tabasco’s most productive region for cacao is Chontalpa, which has ideal conditions for cacao cultivation and is the area where the criolla variety of cacao is thought to have originated.

Traditionally, farmers in the Chontalpa area have sold their cacao to intermediaries, who then market it. However, in recent years, groups (co-operatives) of farmers have been formed, enabling farmers to cut out the intermediaries and get higher prices for their harvest. The cooperatives allow joint purchasing and other economies of scale.

Serious flooding of cacao-growing regions in 2007 made it difficult for farmers to harvest and trade the cacao they had grown, and also helped spread the fungus Monilia roreri in their plantations. Many farmers gave up, sold their land and left for a new life elsewhere.

The Chontalpa Cacao Presidium was launched in September 2008 to help farmers rebuild the sector and introduce organic certification and other modern developments. Organic certification was obtained, which led to higher prices on the local market. The quality of beans was improved by using better post-harvest fermentation and drying methods.

This Chontalpa project currently benefits 18 producers, members of cooperatives in the Cárdenas and Centro municipalities. It helps farmers market the cacao directly in Mexico (and more recently in Italy) without the need for any intermediaries. The long-term objective is to establish a facility to produce semi-processed cocoa products.

 

The geography of cacao production in Mexico

 Other  Comments Off on The geography of cacao production in Mexico
Feb 032012
 

The cacao bean, the basis of cocoa and chocolate, is one of Mexico’s many culinary gifts to the world. Cacao beans come from the cacao tree (Theobroma cacao).

The main area for cacao cultivation is the Gulf coast state of Tabasco, known for its cacao for over three thousand years, since Olmec times. Cacao became especially prominent in later centuries among the Maya in south-eastern Mexico and the Aztecs in central Mexico, playing a key role in indigenous culture and economy. Among Mexico’s indigenous peoples, cacao beans were ground by hand and then mixed with water, ground corn and chile pepper, often flavored with vanilla or some other tropical plant. This drink was known as chocolate.

Aztec emperor Moctezuma drank chocolate daily. The household of Nezahualcóyotl, the chieftain of neighboring Texcoco, consumed more than 20 kg (44 lbs) of cacao a day. Cacao beans were traded throughout the region and were an important item of tribute in the Aztec empire. Cacao beans were widely used in Middle America as a form of currency; cacao beans were accepted in many regions and could be traded for almost anything.

For a fascinating, detailed, and meticulously referenced geographical analysis of cacao cultivation in pre-Columbian times, see  “The Distribution of Cacao Cultivation in Pre-Columbian America” by John F. Bergmann (Annals of the Association of American Geographers, Vol. 59, 1969).

Today, of course, cacao beans are used not only in the production of chocolates, but also for cacao-flavored liquor, cocoa butter and instant cocoa drinks.

Production methods

The south-eastern state of Tabasco currently accounts for around 70% of Mexican cacao production, with Chiapas adding 29% and Oaxaca and Guerrero 1% between them, though cacao trees are now cultivated as far north as Veracruz on the Gulf coast and Colima on the Pacific coast.

Cacao trees grow up to 6 m high with leaves up to 30 cm (12 in) long. The trees flower from the trunk and older branches. Seed pods contain cacao seeds which look somewhat like almonds.

Harvesting of the pod-like fruit (the cabosse) of the cacao tree runs from October to April each year. It is critical to choose the ripe pods and mature trees can be harvested several times each year.

How much cacao does Mexico produce?

Annual cacao production in Mexico

Annual cacao production in Mexico. Source: Financiera Rural, 2009

In 2008, Mexico produced 27,548 metric tons of cacao. Production has fallen rapidly since 2003 (see graph above) when it was almost twice as high at 49,965 metric tons.

The main reason for the drop in production is the low yield of cacao plantations, which has led many farmers to migrate away or choose alternative crops which have a greater profit potential. This is clearly indicated by the statistics for the area being used for cacao production which has also declined rapidly (see graph below) from about 82,000 hectares in 2003 to just 60,000 hectares in 2007.

The annual area under cacao in Mexico

The annual area under cacao in Mexico. Source: Financiera Rural, 2009

In any given year, less than 1% of this area suffers any form of climatic hazard that eliminates production. The average yield of cacao has risen by almost 8% a year in recent years to reach 578 kilos a hectare in 2007, as older and less productive trees are abandoned or replaced by other crops. Yields are higher than average in Guerrero and Oaxaca, about average in Tabasco, and well below average in Chiapas.

More than 70% of the world’s cacao production is in Africa, with a further 16% in Asia and Oceania. Mexico currently produces only 0.01% of the world production of 4 million metric tons a year. In 2007, Mexico exported 160,000 metric tons of cacao and cacao-derived products. However, to meet the demands of the domestic chocolate industry, Mexico also has to import each year at least 40,000 metric tons of cacao and products derived from cacao.

Consumption of cacao in Mexico has remained fairly steady at about 56,000 metric tons a year. The world demand for cacao is expected to increase by more than a million tons a year within the next 15 years, with strong demand from consumers in China, India and southern Asia. Europe is currently responsible for more than 40% of the world demand for cacao and its derivatives. Europe’s share of total world demand will fall dramatically in coming decades.

Source of data:

  • Monografía del cacao. Financiera Rural, August 2009.

Related posts:

Nestlé helps program to regenerate Mexico’s coffee industry

 Mexico's geography in the Press  Comments Off on Nestlé helps program to regenerate Mexico’s coffee industry
Jan 282012
 

Coffee trees are planted on 688,000 ha in 12 states, mainly in southern Mexico. The main coffee-producing states are Chiapas, Oaxaca, Puebla, Veracruz and Guerrero. As we reported in an earlier post, Mexico is financing a program to gradually replace aging coffee trees. The average yields of coffee in the 2010-11 season did show a slight increase on previous years. Officials hope this is the start of a trend of higher yields as the older trees are gradually replaced. The program to replace coffee trees is being supported by Nestlé, the Swiss food corporation.

Between 2002 and 2010, more than 4,000 growers in several states benefited from Nestlé’s distribution of more than 3.9 million coffee plants as part of a nationwide plan to replace aging coffee trees. Nestlé has since announced that it plans to establish its first coffee-propagation center in Mexico, in the southern state of Chiapas, in a joint venture with Agromod, a Mexican crop technology company, and the National Forestry, Farming and Fishing Institute (Instituto Nacional de Investigaciones Forestales, Agrícolas y Pecuarias, INIFAP).

The project will supply 30 million coffee plants by 2020, and mean that Nestlé will no longer need to import coffee plants to Mexico from its facility in Tours, France. As many as 20,000 coffee-growers will benefit from the project. Most of the new plants will be arabica varieties (for premium beans); the remainder will be robusta varieties (used in instant coffee blends).

Related posts:

Dramatic fall in grain production means higher imports

 Mexico's geography in the Press  Comments Off on Dramatic fall in grain production means higher imports
Dec 082011
 

Mexico’s production of basic grains has fallen 8.5% this year (compared to 2010) to 28.5 million metric tons, according to FAO (Food and Agriculture Organization) estimates. This is a very serious fall, exceeded (on a percentage basis) only by South Africa (15.8%) and Ethiopia (11.3%).

As a result of the fall in production (largely due to the drought affecting much of the northern part of the country), Mexico is expected to import about 11 million tons of grain, mainly corn, almost a million tons more than last year.

Mexico was the world’s 6th largest grain producer in 2010, but has fallen to 8th spot in 2011, overtaken by Russia and Argentina. The world’s five largest grain producers are USA, China, European Union, Brazil and India. Countries lagging behind Mexico for production of basic grains include Canada, Australia, Indonesia and Nigeria.

Food speculation fuels a tortilla crisis in Mexico

 Books and resources, Teaching ideas  Comments Off on Food speculation fuels a tortilla crisis in Mexico
Oct 292011
 

The Ecologist Film Unit has produced an excellent 8-minute video on how financial speculation on corn (maize) has led to a dramatic rise in the price of corn tortillas, with potentially disastrous effects for the health and well-being of the many of Mexico’s poorest. Reporter Tom Levitt’s video, accompanied by text, presents a compelling case, one which would be an excellent starting-point for class discussions.

Two short quotes set the scene:

“For many Mexicans, particularly the estimated 40 million living on less than $5 a day (£3), tortillas account for almost half of their average daily calorie intake. As a whole, the country consumes 23 times more maize than rice.”

“In 2000 there was $6 billion invested in commodities, by 2011 it was $340 billion, of which $126 billion, according to data from Barclays Capital, is reported to be invested in food. The vast majority of this new investment has been by speculators with no interest in the agricultural sector or in actually taking delivery of the commodity.”

The result? Higher prices for corn, greater unpredictability in prices, and adverse changes to the diet of tens of thousands, as corn becomes more expensive than meager household budgets permit.

The video is a powerful indictment of the harm being done to ordinary people in many parts of the developing world by rich-world market speculators and investment banks. Watch it now, or read the full article:

Sep 032011
 

The sugar industry accounts for 0.5% of national GDP. Sugarcane fields cover 670,000 hectares (1.6 million acres) in Mexico, the second largest crop area after corn. Yields of sugarcane range from 60-70 metric tons/hectare.

Main growing areas in Mexico

The main cane producing states are: Veracruz (1.9 million metric tons), San Luis Potosí and Jalisco (each 0.6 million), Oaxaca and Chiapas (each 0.3 million), and Nayarit, Tamaulipas and Morelos (each 0.2 million). Veracruz is the leading state by far in terms of area of sugarcane fields, with 260,000 hectares devoted to cane, folled by Jalisco, San Luis Potosí and Oaxaca (each with around 56,000 ha) and Tamaulipas (43,000 ha).

SugarcaneSugarcane fields and their associated sugar mills form a highly distinctive landscape in many parts of Mexico, with the greatest concentrations on the coastal plains on the Gulf and Pacific coasts, together with numerous higher-altitude river valleys in central Mexico.

History and land tenure

Sugarcane was brought to Mexico by Spanish settlers. Many major plantations were established, as they were in the Caribbean and Brazil. Mexico’s indigenous population provided a resident labor force, augmented by the introduction of some slaves from Africa (see Blacks outnumbered Spaniards in Mexico until after 1810).

The large colonial sugar haciendas in Mexico (and some were very, very large indeed) exerted considerable influence over politics and local economies. Sugarcane remained an important crop following the Mexican Revolution (1910 onwards) which led to rural reorganization and much stricter controls on the size of land holdings. Sugarcane is grown on 150,000 farms, making their average size small, under 4.5 hectares (11 acres) each. This is partly a consequence of the Mexican Revolution which limited maximum farm size. About half of all sugarcane production units are 2 hectares or less in area. The small average size of sugarcane farms places severe restrictions on possible investments and effectively prevents any economies of scale.

Employment

The sugarcane sector employs about two million people directly and indirectly. The number of direct jobs includes:

  • 150,000 growers
  • 100,000 seasonal sugarcane cutters
  • 20,000 cane transport workers
  • 30,000 sugarmill workers
  • 7,000 administrative, technical and management personnel

Harvesting and production

The annual harvesting of sugarcane in Mexico runs from late October to June. During the 2010-2011 harvest, 670,000 hectares of cane fields were cut yielding 44 million metric tons of cane, from which 5.2 million metric tons of sugar was extracted, 7.4% more than for the 2009-2010 harvest.

Sugar mills

More than 50 sugar mills currently operate in Mexico. The mills vary greatly in size, age and technology. Many are small, old and inefficient, which increases the cost of sugar production in Mexico compared to countries with newer methods and equipment. Mexico’s sugar mills have weathered numerous financial crises. In 2001, 27 mills were placed under government control, with about half of these mills later sold back to private ownership. In 2005, a revised Sugarcane Law guaranteed a basic reference price for growers, improving their financial security. Almost half of all Mexico’s sugar mills are located in Veracruz state. The remaining sugar mills are scattered among an additional 15 states.

Domestic consumption of sugar

Mexico’s domestic market consumes around 4.5 million metric tons a year, with the largest demand coming from the soft drinks industry. Consumption is expected to fall this year, due to reduced consumer purchasing power and escalating domestic prices for sugar fueled by speculation and supply shortages.

Sugar exports

Mexico is the world’s 6th largest exporter of sugarcane, and the main supplier of sugar to the USA. For the 2010-2011 season, sugar exports to the USA totaled  a record 1.3 million metric tons. This figure has been increasing rapidly in recent years, partly due to sugarcane’s inclusion under the terms of NAFTA.

Despite its exports, Mexico also imports small quantities of sugar, mainly from Nicaragua in order to maintain its own sugar reserves of around 1 million tons.

The challenges faced by Mexico’s sugar industry

Mexico’s sugarcane industry faces numerous serious challenges, including:

  • poor drainage of soils in some areas
  • winter frosts in some mountain areas, especially in the more northerly growing regions.
  • limited rainfall – cane requires 1100–1500 mm (43–60″) of precipitation a year; unreliable precipitation, especially periods of drought, are a major problem, especially in Veracruz where irrigation systems are inadequate
  • level of production inputs (fertilizers, pesticides, etc)
  • transport costs which contribute to the high price of sugarcane in Mexico
  • small size of production units which limits investment and improvements
  • low efficiency of older sugar mills

Environmental degradaion

Environmental degradation is one of the most serious issues facing Mexico’s sugar industry, given the nature of sugarcane processing and the age of many of Mexico’s sugar mills:

  • much of Mexico’s cane is still hand-cut, and burning the cane fields prior to harvest is still a common practice, since it makes harvesting easier and drives out snakes. However, it has an adverse effect on air quality as well as on soil nutrients, structure and microorganisms.
  • Large volumes of water are used in growing and processing sugarcane. Much is wasted; some is returned to groundwater sources or streams heavily polluted. More recycling and water treatment plants are needed.
  • Air pollution is also a problem with some mills still to fit modern emissions control devices.
  • The safe disposal of processing waste (some of which has potential value for subsequent use in other industries) is also a continuing problem. Sugar mills produce a variety of waste materials, many of which are currently dumped.

Further reading: