Required Report - public distribution

**Date:** 9/30/2004

**GAIN Report Number:** MX4114

MX0000

**Mexico**

**Sugar**

**Semi-Annual Report**

**2004**

**Approved by:**

![](media/image1.wmf)Suzanne Heinen

U.S. Embassy Mexico City

**Prepared by:**

Dulce Flores

**Report Highlights:**

Sugar production for MY 2004/05 remains unchanged at 5.41 million metric
tons (MMT). Sugar production for MY 2003/04 was revised downward to 5.33
MMT. Sugar imports increased to 275,000 MT, due to larger imports of
sugar under legally-questionable court injunctions. Human domestic
consumption estimates for MY 2003/04 and 2004/05 increased, due to
continued demand from the soft drink industry.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Semi-Annual Report

Mexico \[MX1\]

\[MX\]

Table of Contents

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

[SUGAR PRODUCTION 3](#sugar-production)

[SUGAR AND HFCS CONSUMPTION 3](#sugar-and-hfcs-consumption)

[SUGAR TRADE 4](#sugar-trade)

[HFCS TRADE 5](#hfcs-trade)

[STOCKS 5](#stocks)

[SECTION II. STATISTICAL TABLES 6](#section-ii.-statistical-tables)

[Centrifugal Sugar Table 6](#centrifugal-sugar-table)

[Sugarcane for Centrifugal Sugar 7](#sugarcane-for-centrifugal-sugar)

[Sugar Prices 8](#sugar-prices)

[Trade Matrixes 8](#trade-matrixes)

[SUGAR TARIFFS 10](#sugar-tariffs)

[EXCHANGE RATE 11](#exchange-rate)

# SECTION I. SITUATION AND OUTLOOK

## SUGAR PRODUCTION

Although the Mexican sugar industry has not yet published its sugar
production estimate, MY 2004/2005 (October/September) sugar production
is forecast to remain unchanged at 5.41 million metric tons (MMT) raw
value. According to sources, this forecast is based on good weather
conditions prevalent throughout the growing season. Sugar production for
MY 2003/04 was revised downward from previous estimates to 5.33 MMT, but
still surpassed MY 2003/04 production. Production benefited from good
weather conditions including timely rainfall. Data for MY 2002/03
remains unchanged.

Area planted for MY 2004/05 was revised downward and area harvested
remains unchanged based on estimated official information. The sugar
cane production forecast for MY 2004/05 was revised upward, based on
good weather conditions and expectations of increased cane yields. Area
planted for MY 2003/04 and 2002/03 was also revised downward and
production of sugar cane was revised upward based on official estimates.

Three years after the expropriation of 27 sugar mills, the federal
government will be ready to begin the reprivatization of the first four
sugar mills: San Francisco--El Naranjal and Industrial Azucarera San
Pedro in the state of Veracruz; La Joya in the state of Campeche; and
Santa Rosalia Chontalpa in the state of Tabasco. The Government of
Mexico (GOM) will pay the corresponding compensations to the original
sugar mill owners from whom they were expropriated by September or
October 2004 and then will sell the mills. Even though the Government
planned to reprivatize all 27 mills in the first 18 months after
expropriation, the filing of court injunctions (a*mparos*) and other
legal issues brought up by the former mill owners have delayed the
reprivatization process. The court cases of other mills are still in the
process of resolution. []{.mark}

[]{.mark}

High fructose corn syrup (HFCS) production for CY 2004 is still forecast
to be between 130,000 to 140,000 MT dry basis, based on the assumption
that no resolution will be reached in the U.S.-Mexico sweetener dispute.
Most of this production is destined for the bakery, food processing,
fruit and juice canning, and yogurt industries, due to the continued
imposition of the 20-percent tax on HFCS-containing beverages. Mexican
production of HFCS is not published by official sources and companies
treat it as confidential information. In CY 2001, the last year prior to
the imposition of the beverage tax, Mexican HFCS production was
estimated between 250,000 to 300,000 MT. All other production
information remains unchanged as reported in MX 4045.

## SUGAR AND HFCS CONSUMPTION

The sugar for human domestic consumption forecast for MY 2004/05 was
revised upward from previous estimates to 5.37 MMT, due to more demand
from the bottling industry as a result of the 20-percent duty on
HFCS-containing beverages. Sugar for human domestic consumption for MY
2003/04 was revised upward to 5.30 MMT, also due to increased usage of
sugar over HFCS by the soft drink industry. The soft drink industry
estimates its MY 2003/04 sugar consumption at about 1.6 MMT. The soft
drink industry and the chocolate manufacturers maintain that sugar
supplies will be tight for the last three months of 2004, as they were
in 2003. Sugar for domestic consumption for MY 2002/03 remains
unchanged.

HFCS consumption for CY 2004 is still 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 HFCS. All other
consumption information remains unchanged as reported in MX 4045.

[]{.mark}

## SUGAR TRADE

[]{.mark}

The forecast for MY 2004/05 sugar exports under the "other
disappearance" category was revised downward to 110,000 MT, due to
lower-than-expected stocks available for use as PITEX sugar. 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 six 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 which 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.

Recently, Mexico has had to import sugar for PITEX use as, according to
some industry sources, not enough domestic sugar has been available for
PITEX and there is a need to meet this demand with imported sugar.
According to both the Chamber for the Sugar and Alcohol Industries and
other industry sources, Mexico's total PITEX sugar demand for MY 2004/05
could be between 180,000 to 200,000 MT.

The estimate for MY 2003/04 sugar exports under "other disappearance"
category was revised downward from previous estimates to 90,000 MT as
there were fewer supplies available for use as PITEX sugar. The estimate
for MY 2002/03 sugar exports under the "other disappearance" category
remains unchanged.

MY 2004/05 total sugar exports were revised upward to 126,000 MT. This
estimate includes Mexico's WTO sugar quota to the U.S. and about 116,000
MT of imported PITEX sugar, some of which is expected to be imported
under the as yet unannounced 2004 sugar TRQ. However, this sugar export
forecast will ultimately be dependent on final sugar production figures,
the outcome, if any, of U.S.-Mexico sweetener negotiations, substitution
by alternative domestic and imported sweeteners, and whether or not the
Ministry of Economy (SE) decides to issue a TRQ for the remainder of
2004. In the unlikely event that SE decides not to establish a 2004 TRQ,
MY 2004/05 sugar exports are forecast at 90,000 MT.

Total sugar export estimates for MY 2003/04 were revised upward to
151,000 MT, based on official information. This data includes
approximately 100,000 MT of PITEX sugar exports, the WTO sugar quota to
the U.S., and some raw sugar that Mexico imported previously and did not
use (Mexican trade data show only, so far, the WTO sugar exports).
Although some industry sources estimate Mexico's total sugar PITEX
demand for MY 2003/04 at 180,000 MT, others claim that PITEX demand
could be higher. Data for total sugar exports for MY 2002/03 remains
unchanged.

MY 2004/05 total sugar imports were revised upward to 151,000 MT, mainly
in refined sugar, due to expectations of greater demand from the
industry. It should be noted that this figure is based on the
expectation that SE will announce a TRQ for refined sugar for the
remainder of 2004. As of the writing of this report, an official
announcement on the 2004 TRQ was imminent. According to SE, the
objective of this measure is the same as that of last year -- to ensure
that there will be enough strategic reserves to meet domestic demand, in
case domestic sugar stocks are insufficient during the balance of 2004
(October-December). It should be noted that the Chamber for the Sugar
and Alcohol Industries maintains the opposite position, that is, that
there is enough domestic sugar available to fulfill PITEX needs or other
domestic needs and that therefore there is no need to import additional
sugar under the proposed TRQ. Unlike the MY 2003/04 sugar import
estimate, the MY 2004/05 sugar import forecast does not take into
account sugar imported duty-free via court injunctions (amparos), given
the legal questionability of these court injunctions and the possibility
that amparos will not be granted in MY 2004/05. In the unlikely event
that SE decides not to establish a 2004 TRQ, MY 2004/05 sugar imports
are forecast at 76,000 MT.

According to official sources, sugar imported through court injunctions
represents close to US\$29 million in tax losses. The Chamber for the
Sugar and Alcohol Industries indicated that it had already discussed
with Mexican juridical authorities the possibility of prohibiting entry
of future sugar imports under the court injunction loophole, as it
believes domestic sugar supplies are sufficient to meet demand. However,
according to different industry sources, demand for duty-free imports
(via questionable court injunctions) was spurred by low domestic sugar
inventories and higher prices.

Total sugar import estimates for MY 2003/04 were revised upward to
275,000 MT. According to the sugar industry, these imports include about
74,000 MT imported under the official sugar TRQ that Mexico announced on
September 27, 2003 (see report MX 3128); about 100,000 MT of sugar
imported for PITEX industries; and the rest imported from Guatemala,
Brazil and Colombia (some of it via the United States) under
legally-questionable court injunctions that allowed sugar imports to
enter duty-free. Import data for MY 2002/03 remain unchanged.

Sugar prices increased 2 percent in July 2004 for standard sugar and 1
percent for refined sugar. For June 1, 2004, prices for standard sugar
were about \$300.00 pesos/50 kg bag (US\$26.20/50 kg bag), and by July
6, prices had increased to about \$312.00 pesos/50 kg bag (US\$27.25/50
kg bag). June 1, 2004 prices for refined sugar were about \$340.00
pesos/50 kg bag (US\$29.70/50 kg bag), and by July 6 prices were
\$345.00 pesos/50 kg bag (US\$30.13/50 kg bag).

## HFCS TRADE

Trade information for HFCS has not changed since report MX 4045. 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. The increase in HFCS exports to the United States has
increased significantly over the past two years -- albeit from a very
small base -- also due to the beverage tax. In order to maintain its
plant in operation, one company has continued to produce HFCS in Mexico
but has decided to export it to the United States, rather than face the
difficulty of selling it domestically.

As of the writing of this report, Mexico and the United States have
approved the establishment and composition of a WTO panel to investigate
the U.S. charge that Mexico's 20-percent tax on all beverages using
sweetener other than cane sugar is WTO inconsistent.

## STOCKS

Stocks for MY 2004/05 were revised downward, due to
smaller-than-expected beginning stocks, but are still large enough to
ensure that strategic reserves are met \-- a level approximating three
months of domestic consumption. Sugar stock levels for MY 2003/04 were
also revised downward due to lower-than-expected sugar production, but,
again, still were large enough to ensure that strategic reserves were
met. Sugar brought into Mexico under legally-questionable court
injunctions during MY 2003/04 is reflected in this number. Ending stocks
for MY 2002/03 remain unchanged.

# SECTION II. STATISTICAL TABLES

## Centrifugal Sugar Table

+--------------------+-------+-------+-------+-------+-------+-------+
|                    |       |       |       |       |       |       |
+--------------------+-------+-------+-------+-------+-------+-------+
| Country            | M     |       |       |       |       |       |
|                    | exico |       |       |       |       |       |
+--------------------+-------+-------+-------+-------+-------+-------+
| Commodity          | S     |       |       |       | (1000 |       |
|                    | ugar, |       |       |       | MT)   |       |
|                    | C     |       |       |       |       |       |
|                    | entri |       |       |       | Raw   |       |
|                    | fugal |       |       |       | Value |       |
+--------------------+-------+-------+-------+-------+-------+-------+
|                    | 2003  |       | 2004  |       | 2005  |       |
|                    |       |       |       |       |       |       |
|                    | Re    |       | Est   |       | For   |       |
|                    | vised |       | imate |       | ecast |       |
+--------------------+-------+-------+-------+-------+-------+-------+
|                    | USDA  | Post  | USDA  | Post  | USDA  | Post  |
|                    | Off   | Est   | Off   | Est   | Off   | Est   |
|                    | icial | imate | icial | imate | icial | imate |
|                    | \[    | \[    | \[    | \[    | \[    | \[    |
|                    | Old\] | New\] | Old\] | New\] | Old\] | New\] |
+--------------------+-------+-------+-------+-------+-------+-------+
| Market Year Begin  | 10    |       | 10    |       | 10    |       |
|                    | /2002 |       | /2003 |       | /2004 |       |
+--------------------+-------+-------+-------+-------+-------+-------+
| Beginning Stocks   | 1172  | 1172  | 1194  | 1194  | 1401  | 1253  |
+--------------------+-------+-------+-------+-------+-------+-------+
| Beet Sugar         | 0     | 0     | 0     | 0     | 0     | 0     |
| Production         |       |       |       |       |       |       |
+--------------------+-------+-------+-------+-------+-------+-------+
| Cane Sugar         | 5229  | 5229  | 5517  | 5330  | 5410  | 5410  |
| Production         |       |       |       |       |       |       |
+--------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Sugar        | 5229  | 5229  | 5517  | 5330  | 5410  | 5410  |
| Production         |       |       |       |       |       |       |
+--------------------+-------+-------+-------+-------+-------+-------+
| Raw Imports        | 1     | 1     | 1     | 40    | 1     | 1     |
+--------------------+-------+-------+-------+-------+-------+-------+
| Refined Imp.(Raw   | 62    | 62    | 105   | 235   | 20    | 150   |
| Val)               |       |       |       |       |       |       |
+--------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Imports      | 63    | 63    | 106   | 275   | 21    | 151   |
+--------------------+-------+-------+-------+-------+-------+-------+
| TOTAL SUPPLY       | 6464  | 6464  | 6817  | 6799  | 6832  | 6814  |
+--------------------+-------+-------+-------+-------+-------+-------+
| Raw Exports        | 12    | 12    | 6     | 48    | 6     | 8     |
+--------------------+-------+-------+-------+-------+-------+-------+
| Refined Exp.(Raw   | 26    | 26    | 60    | 103   | 60    | 118   |
| Val)               |       |       |       |       |       |       |
+--------------------+-------+-------+-------+-------+-------+-------+
| TOTAL EXPORTS      | 38    | 38    | 66    | 151   | 66    | 126   |
+--------------------+-------+-------+-------+-------+-------+-------+
| Human Dom.         | 5097  | 5097  | 5220  | 5305  | 5350  | 5376  |
| Consumption        |       |       |       |       |       |       |
+--------------------+-------+-------+-------+-------+-------+-------+
| Other              | 135   | 135   | 130   | 90    | 130   | 110   |
| Disappearance      |       |       |       |       |       |       |
+--------------------+-------+-------+-------+-------+-------+-------+
| Total              | 5232  | 5232  | 5350  | 5395  | 5480  | 5486  |
| Disappearance      |       |       |       |       |       |       |
+--------------------+-------+-------+-------+-------+-------+-------+
| Ending Stocks      | 1194  | 1194  | 1401  | 1253  | 1286  | 1202  |
+--------------------+-------+-------+-------+-------+-------+-------+
| TOTAL DISTRIBUTION | 6464  | 6464  | 6817  | 6799  | 6832  | 6814  |
+--------------------+-------+-------+-------+-------+-------+-------+
|                    |       |       |       |       |       |       |
+--------------------+-------+-------+-------+-------+-------+-------+

## Sugarcane for Centrifugal Sugar

+------------------+-------+-------+-------+-------+-------+--------+
|                  |       |       |       |       |       |        |
+------------------+-------+-------+-------+-------+-------+--------+
| Country          | M     |       |       |       |       |        |
|                  | exico |       |       |       |       |        |
+------------------+-------+-------+-------+-------+-------+--------+
| Commodity        | Sugar |       |       |       | (1000 |        |
|                  | Cane  |       |       |       | HA)   |        |
|                  | for   |       |       |       | (1000 |        |
|                  | C     |       |       |       | MT)   |        |
|                  | entri |       |       |       |       |        |
|                  | fugal |       |       |       |       |        |
+------------------+-------+-------+-------+-------+-------+--------+
|                  | 2003  |       | 2004  |       | 2005  |        |
|                  |       |       |       |       |       |        |
|                  | Re    |       | Est   |       | For   |        |
|                  | vised |       | imate |       | ecast |        |
+------------------+-------+-------+-------+-------+-------+--------+
|                  | USDA  | Post  | USDA  | Post  | USDA  | Post   |
|                  | Off   | Est   | Off   | Est   | Off   | Es     |
|                  | icial | imate | icial | imate | icial | timate |
|                  | \[    | \[    | \[    | \[    | \[    | \      |
|                  | Old\] | New\] | Old\] | New\] | Old\] | [New\] |
+------------------+-------+-------+-------+-------+-------+--------+
| Market Year      | 11    |       | 11    |       | 11    |        |
| Begin            | /2002 |       | /2003 |       | /2004 |        |
+------------------+-------+-------+-------+-------+-------+--------+
| Area Planted     | 700   | 640   | 700   | 640   | 715   | 640    |
+------------------+-------+-------+-------+-------+-------+--------+
| Area Harvested   | 606   | 606   | 609   | 609   | 610   | 610    |
+------------------+-------+-------+-------+-------+-------+--------+
| Production       | 43948 | 43948 | 44500 | 45456 | 44500 | 45500  |
+------------------+-------+-------+-------+-------+-------+--------+
| TOTAL SUPPLY     | 43948 | 43948 | 44500 | 45456 | 44500 | 45500  |
+------------------+-------+-------+-------+-------+-------+--------+
| Utilization for  | 43948 | 43948 | 44500 | 45456 | 44500 | 45500  |
| Sugar            |       |       |       |       |       |        |
+------------------+-------+-------+-------+-------+-------+--------+
| Utilization for  | 0     | 0     | 0     | 0     | 0     | 0      |
| Alcohol          |       |       |       |       |       |        |
+------------------+-------+-------+-------+-------+-------+--------+
| TOTAL            | 43948 | 43948 | 44500 | 45456 | 44500 | 45500  |
| UTILIZATION      |       |       |       |       |       |        |
+------------------+-------+-------+-------+-------+-------+--------+

## Sugar Prices

+---------+--------+---------+--------+--------+-----------+----------+
| AVERAGE |        |         |        |        |           |          |
| 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 | 291.25  | 9.90   | 308.13 | 340.00    | 10.34    |
| h]{.sma |        |         |        |        |           |          |
| llcaps} |        |         |        |        |           |          |
+---------+--------+---------+--------+--------+-----------+----------+
| [Apri   | 270.04 | 298.25  | 10.44  | 313.20 | 340.00    | 8.55     |
| l]{.sma |        |         |        |        |           |          |
| llcaps} |        |         |        |        |           |          |
+---------+--------+---------+--------+--------+-----------+----------+
| [Ma     | 273.14 | 297.25  | 8.82   | 315.26 | 340.00    | 7.84     |
| y]{.sma |        |         |        |        |           |          |
| llcaps} |        |         |        |        |           |          |
+---------+--------+---------+--------+--------+-----------+----------+
| [Jun    | 278.50 | 302.95  | 8.77   | 320.36 | 345.00    | 7.69     |
| e]{.sma |        |         |        |        |           |          |
| llcaps} |        |         |        |        |           |          |
+---------+--------+---------+--------+--------+-----------+----------+
| [Jul    | 285.05 | 317.90  | 11.52  | 334.24 | 345.00    | 3.21     |
| y]{.sma |        |         |        |        |           |          |
| llcaps} |        |         |        |        |           |          |
+---------+--------+---------+--------+--------+-----------+----------+
| [Augus  | 287.64 | 326.20  | 13.40  | 339.84 | 353.00    | 3.87     |
| 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 August 23, 2004 US\$1.00=\$11.54 pesos

## Trade Matrixes

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

  EXPORTS for MY                            IMPORTS for MY 2003/04\*                
  2003/04\* (Oct-Sept\*)                    (Oct-Sept\*) FROM:                      
  TO:                                                                               

  **U.S.**               7,687              **U.S.**                  73,297        

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

  [South                 12                 [Guatemala]{.smallcaps}   83,270        
  Korea]{.smallcaps}                                                                

  [United                12                 [Brazil]{.smallcaps}      78,498        
  Kingdom]{.smallcaps}                                                              

  [Total of              24                 [Total of                 83,270        
  other]{.smallcaps}                        other]{.smallcaps}                      

  [Others not            2                  [Others not               21,152        
  listed]{.smallcaps}                       listed]{.smallcaps}                     

  Grand total            7,713              Grand total               256,217       
  ---------------------- ------------ ----- ------------------------- ------------- -----

SOURCE: Global Trade Information Services, Inc. World Trade Atlas Mexico
Edition, May 2004. \* Information as of May 2004

Note: Expressed values for H.S. 1701 consolidate the following
subheadings:

1701.11.01, 1701.11.02, 1701.11.03, 1701.11.99, 1701.12.01, 1701.12.02,
1701.12.03, 1701.12.99, 1701.91.01, 1701.99.01, 1701.99.02, & 1701.99.99

  ------------------------- ------------ ----- --------------------- ------------ -----
  **HFCS** H.S. 1702.40                        UNITS: METRIC TONS                 

  EXPORTS for CY 2004\* TO:                    IMPORTS for CY 2004\*              
                                               FROM:                              

  **U.S.**                  6,877              **U.S.**              833          

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

  [Guatemala]{.smallcaps}   29                 [China]{.smallcaps}   132          

  [Total of                 29                 [Total of             132          
  other]{.smallcaps}                           other]{.smallcaps}                 

  [Others not               5                  [Others not           24           
  listed]{.smallcaps}                          listed]{.smallcaps}                

  Grand total               6,911              Grand total           989          
  ------------------------- ------------ ----- --------------------- ------------ -----

SOURCE: Global Trade Information Services, Inc. World Trade Atlas Mexico
Edition, May 2004.

\* Information as of May 2004

Note: Expressed values for H.S. 1702.40 consolidate the following
subheadings:

1702.40.01, & 1702.40.99.

  ----------------------- ------------ ----- ----------------------- ------------ -----
  **HFCS** H.S. 1702.60                      UNITS: METRIC TONS                   

  EXPORTS for CY 2004\*                      IMPORTS for CY 2004\*                
  TO:                                        FROM:                                

  **U.S.**                651                **U.S.**                2,447        

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

  [Germany]{.smallcaps}   239                [Germany]{.smallcaps}   0            

  [Total of               239                [Total of               0            
  other]{.smallcaps}                         other]{.smallcaps}                   

  [Others not             156                [Others not             0            
  listed]{.smallcaps}                        listed]{.smallcaps}                  

  Grand total             1,046              Grand total             2,447        
  ----------------------- ------------ ----- ----------------------- ------------ -----

SOURCE: Global Trade Information Services, Inc. World Trade Atlas Mexico
Edition, May 2004.

\* Information as of May 2004

Note: Expressed values for H.S. 1702.40 consolidate the following
subheadings

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                   |
|                       | [Dollars/Kg           | modities]{.smallcaps} |
|                       | ]{.smallcaps}        |                       |
|                       |                       | [Do                   |
|                       |                       | llars/Kg]{.smallcaps} |
+-----------------------+-----------------------+-----------------------+
| 1701.11.01            | 0.31668               | 0.36                  |
+-----------------------+-----------------------+-----------------------+
| 1701.11.02            | 0.31668               | 0.36                  |
+-----------------------+-----------------------+-----------------------+
| 1701.11.03            | 0.31668               | 0.36                  |
+-----------------------+-----------------------+-----------------------+
| 1701.12.01            | 0.31668               | 0.36                  |
+-----------------------+-----------------------+-----------------------+
| 1701.12.02            | 0.31668               | 0.36                  |
+-----------------------+-----------------------+-----------------------+
| 1701.12.03            | 0.31668               | 0.36                  |
+-----------------------+-----------------------+-----------------------+
| 1701.91.01            | 0.31668               | 0.36                  |
+-----------------------+-----------------------+-----------------------+
| 1701.99.01            | 0.31668               | 0.36                  |
+-----------------------+-----------------------+-----------------------+
| 1701.99.02            | 0.31668               | 0.36                  |
+-----------------------+-----------------------+-----------------------+
| 1701.99.99            | 0.31668               | 0.36                  |
+-----------------------+-----------------------+-----------------------+
| 1806.10.01            | 0.31668               | 0.36                  |
+-----------------------+-----------------------+-----------------------+
| 2106.90.05            | 0.31668               | 0.36                  |
+-----------------------+-----------------------+-----------------------+
|                       |                       |                       |
+-----------------------+-----------------------+-----------------------+

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 will be subject to duty on the second column. Otherwise, the
product will be subject to the tariff in column three. The Specific
Tariff for third countries in column three, was modified to comply with
WTO regulations and announced in the *Diario Oficial* on July 20, 2004.

## 

## EXCHANGE RATE

+---------------------+-----------+---+-----------+---+-----------+---+
| **MONTHLY EXCHANGE  |           |   |           |   |           |   |
| RATE AVERAGES**     |           |   |           |   |           |   |
+=====================+===========+===+===========+===+===========+===+
|                     | **2002**  |   | **2003**  |   | **2004**  |   |
+---------------------+-----------+---+-----------+---+-----------+---+
| ####### January     | 9.16      |   | 10.59     |   | 10.93     |   |
+---------------------+-----------+---+-----------+---+-----------+---+
| **February**        | 9.10      |   | 10.93     |   | 11.01     |   |
+---------------------+-----------+---+-----------+---+-----------+---+
| **March**           | 9.07      |   | 10.92     |   | 11.00     |   |
+---------------------+-----------+---+-----------+---+-----------+---+
| **April**           | 9.14      |   | 10.61     |   | 11.26     |   |
+---------------------+-----------+---+-----------+---+-----------+---+
| **May**             | 9.49      |   | 10.25     |   | 11.52     |   |
+---------------------+-----------+---+-----------+---+-----------+---+
| **June**            | 9.75      |   | 10.49     |   | 11.38     |   |
+---------------------+-----------+---+-----------+---+-----------+---+
| **July**            | 9.79      |   | 10.44     |   | 11.53     |   |
+---------------------+-----------+---+-----------+---+-----------+---+
| **August**          | 9.83      |   | 10.75     |   | N/A       |   |
+---------------------+-----------+---+-----------+---+-----------+---+
| **September**       | 10.05     |   | 10.92     |   | N/A       |   |
+---------------------+-----------+---+-----------+---+-----------+---+
| **October**         | 10.09     |   | 11.17     |   | N/A       |   |
+---------------------+-----------+---+-----------+---+-----------+---+
| **November**        | 10.19     |   | 11.12     |   | N/A       |   |
+---------------------+-----------+---+-----------+---+-----------+---+
| **December**        | 10.21     |   | 11.25     |   | N/A       |   |
+---------------------+-----------+---+-----------+---+-----------+---+
| **Annual Avg.**     | **9.82**  |   | **10.79** |   | N/A       |   |
+---------------------+-----------+---+-----------+---+-----------+---+
| ###                 |           |   |           |   |           |   |
| ##### Source: Mexic |           |   |           |   |           |   |
| an Federal Register |           |   |           |   |           |   |
|                     |           |   |           |   |           |   |
| **Note: Monthly     |           |   |           |   |           |   |
| rates are averages  |           |   |           |   |           |   |
| of daily exchange   |           |   |           |   |           |   |
| rates from the      |           |   |           |   |           |   |
| Banco de Mexico.**  |           |   |           |   |           |   |
+---------------------+-----------+---+-----------+---+-----------+---+