U.S. May Boost Mexico Sugar Imports, Imperial Says

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U.S. may import 44 percent more sugar from Mexico in the year that began Oct. 1 to offset a drop in domestic production, said Imperial Sugar Co. Chief Executive Officer John Charles Sheptor.

Imports may rise to as much as 1 million short tons from 694,000 tons a year earlier, Sheptor said yesterday in a telephone interview. U.S. buyers may turn to their southern neighbor as the peso’s 8.5 percent plunge against the dollar this year makes it cheaper than buying domestic supplies, he said.

“The economic incentive is for the producer to ship north,” Sheptor said. “This will potentially cause a shortfall in the Mexico marketplace.”

Sugar Land, Texas-based Imperial, the maker of Imperial, Dixie and Holly sweeteners, is seeking to boost its share of Mexican sales after a trade agreement opened U.S, Canadian and Mexican markets to each other last year.

Imperial formed a joint venture in 2007 with a Mexican producer to market the sweetener in the U.S. The company plans to market about 460,000 tons of Mexican sugar this year.

Imperial rose 49 cents, or 7.2 percent, to $7.28 at 12:42 p.m. New York time in Nasdaq Stock Market trading. The shares have fallen 63 percent in the past year.

Mexican Industry

Mexican sugar output may fall 3.1 percent to 5.35 million metric tons in the crop year ending Sept. 30, 2009, from an estimated 5.52 million tons last year, according to the National Sugar Cane Grower’s Association.

Mexico is the world’s sixth-largest producer of the sweetener and has 57 mills operating in the country. Of those, about a third are operated by the government. Agriculture Minister Alberto Cardenas said the government was close to selling the mills off last year. No sales have been announced.

Mills in Mexico may consolidate as they seek to produce sugar more efficiently and on a larger scale to sell to the U.S., Sheptor said.

Raw-sugar futures for May delivery rose 0.19 cent, or 1.5 percent, to 13 cents a pound at 12:43 p.m. on ICE Futures U.S. in New York.