Source: POLITICO'S MORNING AGRICULTURE, 3/12/20

The Trump administration has so far resisted raising the overall tariff-rate quota for imports of raw sugar, but it might need to reconsider if the Mexican sugar situation continues to worsen.

Mexico accounted for about one-third of U.S. sugar imports, or 1 million short tons, during the 2018-19 marketing year. But its production this year is expected to fall by about 20 percent to 5.2 million short tons. That could affect how much sugar Mexico can supply to the U.S., which has faced its own production challenges from poor weather in key sugarcane and sugar beet growing areas.

NAFTA originally gave Mexico unrestricted access to the sugar market. But that changed after a recent agreement to resolve an anti-dumping and countervailing duty case brought by U.S. producers. Now the amount Mexico can ship varies each year, based on U.S. needs.

Mexico has to notify the U.S. by the end of March how much sugar it thinks it can supply during the 2019-20 marketing year. "That information will be essential in determining how much sugar from other importers may be necessary," said Phillip Hayes, a spokesperson for the American Sugar Alliance.

Typically, about 70 percent of what Mexico ships to the U.S. is raw sugar and 30 percent refined. But USDA has reallocated 300,000 short tons of Mexico's quota this year from raw to refined, as reduced U.S. sugar beet production last year strained cane sugar refining capacity.