Required Report - public distribution

**Date:** 4/06/2004

**GAIN Report Number:** MX4045

MX0000

**Mexico**

**Sugar**

**Annual Report**

**2004**

**Approved by:**

![](media/image1.wmf)William L. Brant

Mexico City

**Prepared by:**

Dulce Flores

**Report Highlights:**

The sugar production forecast for MY 2004/05 has not been set, but it is
expected to be higher than 5.4 MMT. Sugar production for MY 2003/04 was
revised upward to 5.51 million metric tons (MMT), due to good weather
and improved production practices. Sugar imports for MY 2004/05 are
expected to decrease compared to MY 2003/04 imports. Human domestic
sugar consumption for MY 2004/05 is forecast to remain high, due to
continued demand from the soft drink industry.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Unscheduled Report

Mexico \[MX1\]

\[MX\]

Table of Contents

[SECTION I. SITUATION AND OUTLOOK 3](#section-i.-situation-and-outlook)

[SUGAR PRODUCTION 3](#sugar-production)

[HFCS PRODUCTION 3](#hfcs-production)

[SUGAR AND HFCS CONSUMPTION 4](#sugar-and-hfcs-consumption)

[SUGAR TRADE 4](#sugar-trade)

[HFCS TRADE 5](#hfcs-trade)

[STOCKS 6](#stocks)

[SECTION II. STATISTICAL TABLES 7](#section-ii.-statistical-tables)

[Centrifugal Sugar Table 7](#centrifugal-sugar-table)

[Sugarcane for Centrifugal Sugar 8](#sugarcane-for-centrifugal-sugar)

[Sugar Prices 9](#sugar-prices)

[Trade Matrixes 9](#trade-matrixes)

[Sugar Tariffs 11](#sugar-tariffs)

# SECTION I. SITUATION AND OUTLOOK

## SUGAR PRODUCTION

The Mexican sugar industry has not yet set a sugar production estimate
for MY 2004/05 (October/September), however, sugar production is
forecast to reach at least 5.4 million metric tons (MMT) raw value. This
forecast is based on the relatively good weather experienced during the
growing season. However, production will also depend on timely
maintenance for the sugar mills, and the availability of credit and
incentives to keep the business growing.

There is still uncertainty in the sugar sector, due to the Mexican
government's inability to follow its overall sugar policy for the
industry and due to the as-yet unresolved issues pertaining to the
expropriation of the sugar mills. Government compensation for the mills
has not yet been paid to the previous owners, in part due to the owners'
filing of court injunctions against the government's plans to
reprivatize the mills. Furthermore, in February 2004, the government
lost the court injunctions of four sugar mills, which were subsequently
returned to their previous owners. Of the 27 mills expropriated by the
Mexican government, the government so far owns 13 mills. Although it has
announced the reprivatization of these mills, no compensations have yet
been paid to the mill owners. The court cases of other mills are still
in the process of resolution. The government believes that the mills
have increased in value, due to better industry reorganization. However,
there are some analysts who believe that the government should close
some of the more inefficient sugar mills instead of selling them.

Planted sugarcane area for MY 2004/05 is forecast to increase slightly
as some higher technology mills are increasing area planted and field
fertilization, due to higher demand. Virtually all sugarcane goes to the
production of centrifugal sugar. The sugarcane harvest occurs between
December and May. Cane yields for MY 2004/05 are forecast to be almost
73 MT/ha, due to expected good weather conditions and more efficient
production techniques. Sugar yields continue to be good, due to
improvements in harvesting and milling techniques. Sugarcane costs of
production vary according to the region, ranging from 10,000 to 12,000
pesos/ha. (US\$900 to \$1,080/ha.).

Sugar production for MY 2003/04 has been revised upward to 5.5 MMT raw
value, based on recent sugar industry information. The sugar industry
indicates that this increase is a result of good weather, better
technology used in the mills, good maintenance and government investment
in their sugar mills. The government has indicated that the objective of
the expropriation was to first make the sugar mills more productive and
profitable and to then privatize them again. However, the chocolate
manufacturers and the soft drink industries are more conservative on the
sugar production estimates and believe sugar production will be about
5.3 MMT raw value for MY 2003/04. Planted and harvested sugarcane area
for MY 2003/04 remains unchanged. Cane yields for MY 2003/04 are
estimated at 73 MT/Ha. Mill yields for MY 2003/2004 are expected to be
similar to MY 2002/03 yields of 11.21 percent. Sugar production for MY
2002/03 remains unchanged as does planted and harvested sugarcane area.

## HFCS PRODUCTION

High fructose corn syrup (HFCS) production for CY 2004 is forecast to be
between 130,000 to 140,000 MT dry basis, due to the continued imposition
of the 20-percent tax on HFCS-containing beverages and based on the
assumption that no resolution will be reached in the U.S.-Mexico
sweetener dispute. Mexican HFCS production for CY 2003 is estimated at
about 130,000 MT dry basis. Those companies manufacturing HFCS in Mexico
have indicated that the tax has harmed industry investment and at least
one company continues to seek legal redress in the Mexican courts. U.S.
corn imports, used in the local manufacture of HFCS, have also been
adversely affected by the HFCS beverage tax. Mexican production of HFCS
is not published by official sources and companies treat it as
confidential information.

During the debates in the Mexican Congress to restructure the 20-percent
tax on HFCS-containing beverages at the end of 2003 and, despite efforts
from different interested parties in Mexico to have Congress remove the
tax, the Mexican Congress voted on December 31, 2003, to continue the
tax in its original form. This decision was subsequently published in a
*Diario Oficial* announcement of the same date under the 2004 Law of
Special Taxes on Production and Services (see report MX4010).

## SUGAR AND HFCS CONSUMPTION

Sugar for human domestic consumption for MY 2004/05 is forecast at 5.3
MMT raw value. This forecast is based on the assumption that the
bottling industry will continue using mostly sugar, due to the
20-percent duty on HFCS-containing beverages. According to the soft
drink industry, soda consumption increased between 2 and 2.5 percent in
CY 2003 and is expected to grow 3.5 percent or more in CY 2004. Sugar
for human domestic consumption for MY 2003/04 was revised upward to 5.2
MMT raw value, due to increased usage of sugar over HFCS by the soft
drink industry because of the 20-percent tax on HFCS use in beverages.
The soft drink industry and the chocolate manufacturers believe that
sugar supplies will be tight again for MY 2003/04 and that there will
not be enough refined sugar for their needs. The belief that MY 2002/03
ending stocks would be short and not of the quality needed by end users
led the government to authorize a tariff-rate-quota for refined sugar to
supply the market from October to December of 2003. Sugar for human
domestic consumption for MY 2002/03 was revised slightly upward based on
final official data.

According to the industry, HFCS consumption for CY 2004 is forecast to
be between 130,000 to 140,000 MT dry basis, as only the bakery, food
processing, fruit and juice canning, and yogurt industries continue to
use fructose. HFCS consumption for CY 2003 is estimated at 130,000 MT.
The soft drink industry had been the largest HFCS user in Mexico prior
to the imposition of the 20-percent HFCS beverage tax in January 2002.
According to industry information, total domestic HFCS consumption for
CY 2001 was about 600,000 MT -- an indication of what the level of HFCS
consumption in Mexico would be if the 20-percent duty on HFCS-containing
beverages were lifted.

## SUGAR TRADE

Sugar exports for MY 2004/05 under the "other disappearance" category is
forecast at about 130,000 MT raw value for the Mexican re-export program
(PITEX). The PITEX program allows domestically-produced sugar to be sold
as raw material for further processing to Mexican food manufacturers,
who buy the sugar at about the world price. The food manufacturers must
process the sugar within three months of the date of purchase and then
must export the final processed product. Given this process, the GOM
classifies the sugar sold under the PITEX program as exports. The
underlying rationale behind the PITEX program is to allow Mexican sugar
mills to fulfill their export quota while at the same time maintaining
some flexibility with regard to domestic sugar supplies. This enables
the industry to avoid the situation that would result from selling raw
sugar on the world market and then importing it back, should there be an
unexpected domestic shortage. Also, sugar mills and processors avoid
transportation expenses.

The estimate for MY 2003/04 sugar exports under the "other
disappearance" category was revised downward to 130,000 MT raw value
from previous estimates, as this is the amount of domestic sugar that
has been destined for use by PITEX. However, according to some sources,
PITEX sugar could reach a total estimate of 163,000 MT for MY 2003/04,
including part of the refined exports. Other sugar end users believe
PITEX sugar exports could be even higher. The estimates for MY 2002/03
sugar exports under the "other disappearance" category remain unchanged.

Total sugar exports for MY 2004/05 are forecast to be at about 66,000
MT, the same level as in MY 2003/04. Total sugar export estimates for MY
2003/04 remain unchanged. Both marketing year estimates, however, will
be dependent on final sugar production figures, the outcome, if any, of
U.S.-Mexico sweetener negotiations, and substitution by alternative
domestic and imported sweeteners. At the writing of this report, the
U.S. and the Mexican governments, as well as the sweeteners industries
of both countries, are continuing negotiations on the final amount of
duty-free sugar to be shipped to the U.S. as well as access for HFCS.

The Mexican industry had been exporting excess sugar to the world market
on a per mill-quota basis to prevent downturns in domestic sugar prices
until MY 2002/03, when it started consuming more sugar domestically. MY
2002/03 total sugar exports were revised downward from previous
estimates as more sugar was consumed domestically. It should be noted
that this increase in sugar consumption coincided with the imposition of
the 20-percent HFCS tax.

Total sugar imports for MY 2004/05 are forecast to be lower compared to
MY 2003/04 due to adequate sugar inventories. Total sugar imports for MY
2003/04 were revised upward from previous estimates, mainly for refined
sugar. Most refined imports were done under the official sugar TRQ that
Mexico announced on September 27, 2003 (see report MX 3128). The
objective of this measure was to ensure enough strategic reserves to
meet domestic demand, in case domestic sugar stocks were insufficient
during the balance of CY 2003 (September 27 -- December 31, 2003).
Government authorities also indicated that one of the motives for
implementing this measure was to deter price speculation and sugar price
increases at the end of 2003. In fact, wholesale prices for refined
sugar stopped increasing and remained close to \$360.00/ pesos/50 kg
(US\$31.85/50 kg) from October to December 2003. The sugar industry
indicated that of the total 112,000 MT that was allowed to enter under
the TRQ, about 70,000 MT were in fact imported under this category from
October to December 2003, mainly from Brazil. However, according to the
Cane Sugar Producers Association, other sugar imports from Guatemala,
Brazil and Colombia were brought into Mexico under ambiguous court
injunctions that allowed sugar imports to enter duty-free; the volume
amounts of these sugar imports could not be confirmed. Total sugar
imports for MY 2002/03 were revised slightly downward to reflect
official trade data.

## HFCS TRADE

Due to the imposition of the 20-percent duty on HFCS-containing soft
drinks and beverages and given the assumption that it will remain in
place, HFCS imports for CY 2004 are forecast to continue to be
insignificant as they were for CY 2003 -- at approximately 7,121 MT. The
Secretariat of Economy has not determined the amount of the CY 2004 HFCS
quota nor how the import permit system for U.S. HFCS imports will
function, since there has been no resolution of the U.S.-Mexico
sweetener dispute. It should be noted that on March 17, 2004, USTR
announced it had filed a demand at the WTO against Mexico over the
20-percent tax on HFCS-containing beverages. U.S. HFCS imports have
decreased 97 percent since the imposition of the HFCS tax in January
2002 (HTS categories 1702.40 and 1702.60).

## STOCKS

Stocks for MY 2004/05 are forecast to be enough to ensure strategic
reserves, a level approximating three months of consumption. Sugar stock
levels for MY 2003/04 were revised upward due to larger sugar imports
under the TRQ to prevent sugar shortages by the end of 2003. Ending
stocks for MY 2002/03 were adjusted slightly upward reflecting lower
exports.

# SECTION II. STATISTICAL TABLES

## 

## Centrifugal Sugar Table

+-----------------------+-------+-------+------+-------+------+------+
| **Mexico**            |       |       |      |       |      |      |
+-----------------------+-------+-------+------+-------+------+------+
| **Centrifugal Sugar** |       |       |      |       |      |      |
+-----------------------+-------+-------+------+-------+------+------+
|  (1000 MT)            | **2   |       | **20 |       | **20 |      |
|                       | 003** |       | 04** |       | 05** |      |
|                       |       |       |      |       |      |      |
|                       | *     |       | **Es |       | **Fo |      |
|                       | *Revi |       | tima |       | reca |      |
|                       | sed** |       | te** |       | st** |      |
+-----------------------+-------+-------+------+-------+------+------+
|                       | *     | *     | **   | *     | **   | **   |
|                       | *USDA | *Post | USDA | *Post | USDA | Post |
|                       | Off   | Est   | Offi | Est   | Offi | Esti |
|                       | icial | imate | cial | imate | cial | mate |
|                       | \[Ol  | \[Ne  | \    | \[Ne  | \    | \    |
|                       | d\]** | w\]** | [Old | w\]** | [Old | [New |
|                       |       |       | \]** |       | \]** | \]** |
+-----------------------+-------+-------+------+-------+------+------+
| **Market Year Begin** | *     |       | **1  |       | **1  |      |
|                       | *10/2 |       | 0/20 |       | 0/20 |      |
|                       | 002** |       | 03** |       | 04** |      |
+-----------------------+-------+-------+------+-------+------+------+
| **Beginning Stocks**  | 1172  | 1172  | 1193 | 1194  | 0    | 1401 |
+-----------------------+-------+-------+------+-------+------+------+
| **Beet Sugar          | 0     | 0     | 0    | 0     | 0    | 0    |
| Production**          |       |       |      |       |      |      |
+-----------------------+-------+-------+------+-------+------+------+
| **Cane Sugar          | 5229  | 5229  | 5464 | 5517  | 0    | 5410 |
| Production**          |       |       |      |       |      |      |
+-----------------------+-------+-------+------+-------+------+------+
| **TOTAL Sugar         | 5229  | 5229  | 5464 | 5517  | 0    | 5410 |
| Production**          |       |       |      |       |      |      |
+-----------------------+-------+-------+------+-------+------+------+
| **Raw Imports**       | 4     | 1     | 4    | 1     | 0    | 1    |
+-----------------------+-------+-------+------+-------+------+------+
| **Refined Imp.(Raw    | 61    | 62    | 99   | 105   | 0    | 20   |
| Val)**                |       |       |      |       |      |      |
+-----------------------+-------+-------+------+-------+------+------+
| **TOTAL Imports**     | 65    | 63    | 103  | 106   | 0    | 21   |
+-----------------------+-------+-------+------+-------+------+------+
| **TOTAL SUPPLY**      | 6466  | 6464  | 6760 | 6817  | 0    | 6832 |
+-----------------------+-------+-------+------+-------+------+------+
| **Raw Exports**       | 6     | 12    | 6    | 6     | 0    | 6    |
+-----------------------+-------+-------+------+-------+------+------+
| **Refined Exp.(Raw    | 40    | 26    | 60   | 60    | 0    | 60   |
| Val)**                |       |       |      |       |      |      |
+-----------------------+-------+-------+------+-------+------+------+
| **TOTAL EXPORTS**     | 46    | 38    | 66   | 66    | 0    | 66   |
+-----------------------+-------+-------+------+-------+------+------+
| **Human Dom.          | 5092  | 5097  | 5195 | 5220  | 0    | 5350 |
| Consumption**         |       |       |      |       |      |      |
+-----------------------+-------+-------+------+-------+------+------+
| **Other               | 135   | 135   | 150  | 130   | 0    | 130  |
| Disappearance**       |       |       |      |       |      |      |
+-----------------------+-------+-------+------+-------+------+------+
| **Total               | 5227  | 5232  | 5345 | 5350  | 0    | 5480 |
| Disappearance**       |       |       |      |       |      |      |
+-----------------------+-------+-------+------+-------+------+------+
| **Ending Stocks**     | 1193  | 1194  | 1349 | 1401  | 0    | 1286 |
+-----------------------+-------+-------+------+-------+------+------+
| **TOTAL               | 6466  | 6464  | 6760 | 6817  | 0    | 6832 |
| DISTRIBUTION**        |       |       |      |       |      |      |
+-----------------------+-------+-------+------+-------+------+------+

## Sugarcane for Centrifugal Sugar

+----------------------+-------+-------+------+-------+------+-------+
| **Mexico**           |       |       |      |       |      |       |
+----------------------+-------+-------+------+-------+------+-------+
| **Sugar Cane for     |       |       |      |       |      |       |
| Centrifugal**        |       |       |      |       |      |       |
+----------------------+-------+-------+------+-------+------+-------+
|  (1000 MT) (1000     | **2   |       | **20 |       | **20 |       |
| Ha.)                 | 003** |       | 04** |       | 05** |       |
|                      |       |       |      |       |      |       |
|                      | *     |       | **Es |       | **Fo |       |
|                      | *Revi |       | tima |       | reca |       |
|                      | sed** |       | te** |       | st** |       |
+----------------------+-------+-------+------+-------+------+-------+
|                      | *     | Post  | **   | *     | **   | *     |
|                      | *USDA | Est   | USDA | *Post | USDA | *Post |
|                      | Offic | imate | Of   | Est   | Offi | Est   |
|                      | ial** |       | fici | imate | cial | imate |
|                      |       | *     | al** | \[Ne  | \    | \[Ne  |
|                      | *     | *\[Ne |      | w\]** | [Old | w\]** |
|                      | *\[Ol | w\]** | **\  |       | \]** |       |
|                      | d\]** |       | [Old |       |      |       |
|                      |       |       | \]** |       |      |       |
+----------------------+-------+-------+------+-------+------+-------+
| **Market Year        | *     |       | **1  |       | **1  |       |
| Begin**              | *11/2 |       | 1/20 |       | 1/20 |       |
|                      | 002** |       | 03** |       | 04** |       |
+----------------------+-------+-------+------+-------+------+-------+
| **Area Planted**     | 700   | 700   | 700  | 700   | 0    | 715   |
+----------------------+-------+-------+------+-------+------+-------+
| **Area Harvested**   | 606   | 606   | 609  | 609   | 0    | 610   |
+----------------------+-------+-------+------+-------+------+-------+
| **Production**       | 43948 | 43948 | 4    | 44500 | 0    | 44500 |
|                      |       |       | 4500 |       |      |       |
+----------------------+-------+-------+------+-------+------+-------+
| **TOTAL SUPPLY**     | 43948 | 43948 | 4    | 44500 | 0    | 44500 |
|                      |       |       | 4500 |       |      |       |
+----------------------+-------+-------+------+-------+------+-------+
| **Utilization for    | 43948 | 43948 | 4    | 44500 | 0    | 44500 |
| Sugar**              |       |       | 4500 |       |      |       |
+----------------------+-------+-------+------+-------+------+-------+
| **Utilization for    | 0     | 0     | 0    | 0     | 0    | 0     |
| Alcohol**            |       |       |      |       |      |       |
+----------------------+-------+-------+------+-------+------+-------+
| **TOTAL              | 43948 | 43948 | 4    | 44500 | 0    | 44500 |
| UTILIZATION**        |       |       | 4500 |       |      |       |
+----------------------+-------+-------+------+-------+------+-------+

## Sugar Prices

+---------+--------+---------+---------+--------+---------+----------+
| SUGAR   |        |         |         |        |         |          |
| PRICES  |        |         |         |        |         |          |
|         |        |         |         |        |         |          |
| UNITS:  |        |         |         |        |         |          |
| 50 KG.  |        |         |         |        |         |          |
| BUL     |        |         |         |        |         |          |
| K/PESOS |        |         |         |        |         |          |
+---------+--------+---------+---------+--------+---------+----------+
| MONTH   | ST     |         | CHANGE  | R      |         | CHANGE % |
|         | ANDARD |         | %       | EFINED |         |          |
+---------+--------+---------+---------+--------+---------+----------+
|         | 2003   | 2004    |         | 2003   | 2004    |          |
+---------+--------+---------+---------+--------+---------+----------+
| [Januar | 268.50 | 309.70  | 15.34   | 310.81 | 345.00  | 11.00    |
| y]{.sma |        |         |         |        |         |          |
| llcaps} |        |         |         |        |         |          |
+---------+--------+---------+---------+--------+---------+----------+
| [       | 266.46 | 296.25  | 11.17   | 310.73 | 340.00  | 9.41     |
| Februar |        |         |         |        |         |          |
| y]{.sma |        |         |         |        |         |          |
| llcaps} |        |         |         |        |         |          |
+---------+--------+---------+---------+--------+---------+----------+
| [Marc   | 265.01 | 2       | 8.84    | 308.13 | 3       | 7.09     |
| h]{.sma |        | 88.45\* |         |        | 30.00\* |          |
| llcaps} |        |         |         |        |         |          |
+---------+--------+---------+---------+--------+---------+----------+
| [Apri   | 270.04 | N/a     | N/a     | 313.20 | N/a     | N/a      |
| l]{.sma |        |         |         |        |         |          |
| llcaps} |        |         |         |        |         |          |
+---------+--------+---------+---------+--------+---------+----------+
| [Ma     | 273.14 | N/a     | N/a     | 315.26 | N/a     | N/a      |
| y]{.sma |        |         |         |        |         |          |
| llcaps} |        |         |         |        |         |          |
+---------+--------+---------+---------+--------+---------+----------+
| [Jun    | 278.50 | N/a     | N/a     | 320.36 | N/a     | N/a      |
| e]{.sma |        |         |         |        |         |          |
| llcaps} |        |         |         |        |         |          |
+---------+--------+---------+---------+--------+---------+----------+
| [Jul    | 285.05 | N/a     | N/a     | 334.24 | N/a     | N/a      |
| y]{.sma |        |         |         |        |         |          |
| llcaps} |        |         |         |        |         |          |
+---------+--------+---------+---------+--------+---------+----------+
| [Augus  | 287.64 | N/a     | N/a     | 339.84 | N/a     | N/a      |
| t]{.sma |        |         |         |        |         |          |
| llcaps} |        |         |         |        |         |          |
+---------+--------+---------+---------+--------+---------+----------+
| [S      | 294.90 | N/a     | N/a     | 363.00 | N/a     | N/a      |
| eptembe |        |         |         |        |         |          |
| r]{.sma |        |         |         |        |         |          |
| llcaps} |        |         |         |        |         |          |
+---------+--------+---------+---------+--------+---------+----------+
| [Octobe | 302.40 | N/a     | N/a     | 360.00 | N/a     | N/a      |
| r]{.sma |        |         |         |        |         |          |
| llcaps} |        |         |         |        |         |          |
+---------+--------+---------+---------+--------+---------+----------+
| [       | 303.75 | N/a     | N/a     | 365.00 | N/a     | N/a      |
| Novembe |        |         |         |        |         |          |
| r]{.sma |        |         |         |        |         |          |
| llcaps} |        |         |         |        |         |          |
+---------+--------+---------+---------+--------+---------+----------+
| [       | 319.10 | N/a     | N/a     | 360.00 | N/a     | N/a      |
| Decembe |        |         |         |        |         |          |
| r]{.sma |        |         |         |        |         |          |
| llcaps} |        |         |         |        |         |          |
+---------+--------+---------+---------+--------+---------+----------+

Source: Servicio Nacional de Informacion de Mercados SNIIM-ECONOMIA

2003 Avg. Exchange Rate US\$1.00=\$11.19 pesos

2004 Exchange Rate March 22, 2004 US\$1.00=\$10.98 pesos

\* As of 3^er^ week of March, 2004

## Trade Matrixes

  ---------------------- ------------ ----- ---------------------- ------------- -----
  SUGAR H.S. 1701                           UNITS: METRIC TONS                   

  EXPORTS FOR CY 2003                       IMPORTS FOR CY 2003                  
  TO:                                       FROM:                                

  U.S.                   14,557             U.S.                   57,716        

  [Other]{.smallcaps}                       [Other]{.smallcaps}                  

  [United                11,213             [Brazil]{.smallcaps}   74,368        
  Kingdom]{.smallcaps}                                                           

  [Total of              11,213             [Total of              74,368        
  other]{.smallcaps}                        other]{.smallcaps}                   

  [Others not            858                [Others not            46,421        
  listed]{.smallcaps}                       listed]{.smallcaps}                  

  [Grand                 26,628             [Grand                 178,505       
  total]{.smallcaps}                        total]{.smallcaps}                   
  ---------------------- ------------ ----- ---------------------- ------------- -----

SOURCE: Global Trade Information Services, Inc. World Trade Atlas Mexico
Edition, December 2003.

**[Note: Expressed values for H.S. 1701 consolidates the following
subheadings:]{.smallcaps}**

**1701.11.00 1701.11.01 1701.11.02 1701.11.03 1701.11.99 1701.12.01
1701.12.99 1701.12.02 1701.12.03 1701.91.00 1701.91.01 1701.99.01
1701.99.02 1701.99.03 & 1701.99.99**

  ------------------------- ------------ ----- ---------------------- ------------ -----
  HFCS Subheading 1702.40                      UNITS: METRIC TONS                  

  EXPORTS FOR CY 2003 TO:                      IMPORTS FOR CY 2003                 
                                               FROM:                               

  U.S.                      18,619             U.S.                   2,058        

  [Other]{.smallcaps}                          [Other]{.smallcaps}                 

  [Guatemala]{.smallcaps}   62                 [France]{.smallcaps}   3            

  [Total of                 62                 [Total of              3            
  other]{.smallcaps}                           other]{.smallcaps}                  

  [Others not               28                 [Others not            1            
  listed]{.smallcaps}                          listed]{.smallcaps}                 

  [Grand total]{.smallcaps} 18,709             [Grand                 2,062        
                                               total]{.smallcaps}                  
  ------------------------- ------------ ----- ---------------------- ------------ -----

SOURCE: Global Trade Information Services, Inc. World Trade Atlas Mexico
Edition, December 2003.

**[Note: Expressed values for H.S. 1702.40 consolidates the following
subheadings:]{.smallcaps}**

**1702.40.00, 1702.40.01 & 1702.40.99.**

  ----------------------- ------------ ----- ----------------------- ------------ -----
  HFCS Subheading 1702.60                    UNITS: METRIC TONS                   

  EXPORTS FOR CY 2003 TO:                    IMPORTS FOR CY 2003                  
                                             FROM:                                

  U.S.                    7,251              U.S.                    5,063        

  [Other]{.smallcaps}                        [Other]{.smallcaps}                  

  [Germany]{.smallcaps}   656                [Germany]{.smallcaps}   0            

  [Total of               656                [Total of               0            
  other]{.smallcaps}                         other]{.smallcaps}                   

  [Others not             226                [Others not             0            
  listed]{.smallcaps}                        listed]{.smallcaps}                  

  [Grand                  8,133              [Grand                  5,063        
  total]{.smallcaps}                         total]{.smallcaps}                   
  ----------------------- ------------ ----- ----------------------- ------------ -----

SOURCE: Global Trade Information Services, Inc. World Trade Atlas Mexico
Edition, December 2003.

**[Note: Expressed values for H.S. 1702.60 consolidates the following
subheadings:]{.smallcaps}**

**1702.60.00, 1702.60.01 1702.60.02 & 1702.60.99.**

## Sugar Tariffs

+-----------------------+-----------------------+-----------------------+
| [Mexican Sugar Import |                       |                       |
| Tariffs for           |                       |                       |
| 2004]{.smallcaps}     |                       |                       |
+-----------------------+-----------------------+-----------------------+
| [H.T.S. Tariff \#     | NAFTA Tariffs for     | [Specific Tariff for  |
| Su                    | U.S. Commodities      | Third Country         |
| bheading]{.smallcaps} |                       | Com                   |
|                       | [Do                   | modities]{.smallcaps} |
|                       | llars/Kg]{.smallcaps} |                       |
|                       |                       | [Do                   |
|                       |                       | llars/Kg]{.smallcaps} |
+-----------------------+-----------------------+-----------------------+
| 1701.11.01            | 0.31668               | 0.39586               |
+-----------------------+-----------------------+-----------------------+
| 1701.11.99            | 0.31668               | 0.39586               |
+-----------------------+-----------------------+-----------------------+
| 1701.12.01            | 0.31668               | 0.39586               |
+-----------------------+-----------------------+-----------------------+
| 1701.12.99            | 0.31668               | 0.39586               |
+-----------------------+-----------------------+-----------------------+
| 1701.91.01            | 0.31668               | 0.39586               |
+-----------------------+-----------------------+-----------------------+
| 1701.99.01            | 0.31668               | 0.39586               |
+-----------------------+-----------------------+-----------------------+
| 1701.99.99            | 0.31668               | 0.39586               |
+-----------------------+-----------------------+-----------------------+
| 1702.90.01            | 0.31668               | 0.39586               |
+-----------------------+-----------------------+-----------------------+
| 1806.10.01            | 0.31668               | 0.39586               |
+-----------------------+-----------------------+-----------------------+
| 2106.90.05            | 0.31668               | 0.39586               |
+-----------------------+-----------------------+-----------------------+
|                       |                       |                       |
+-----------------------+-----------------------+-----------------------+

Source: Secretariat of Economy

Note: The sugar importer must have a written statement from the exporter
that certifies that the product has not benefited from the U.S. Sugar
Re-export Program. If the importer has this statement, then the
sugar-containing products covered by these tariff lines will be subject
to a tariff that is derived by multiplying the regular \"most favored
nation\" (MFN) tariff in effect at the time of importation by a factor
of 0.8. If the importer does not have that written statement, then the
merchandise will be subject to the regular MFN tariff without any
reduction.