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Nicaragua is expecting a record sugar harvest this 2009/10 season of 544,000 tonnes, 4.8 percent higher than the previous cycle, as growers try to expand production by planting new areas to fill export demand. "We have never had production as high as what we expect for 2009/10," Mario Amador, the head of the National Commission of Sugar Producers, told Reuters in an interview on Thursday.
In 2008/09, Nicaragua produced 519,000 tonnes of sugar, Amador said. Producers were scrambling to plant new cane fields to fill an expected jump in exports after the small Central American nation joined several international trade deals, he said.
"Nicaragua has signed different trade agreements with countries like the United States, Mexico, Canada and Taiwan and this has motivated us to increase our planted areas, production and exports," Amador said. He said production has held steady for the past decade but with the new push sugar output could continue to grow, reaching 644,000 tonnes in the next three years.
Both Mexico and the United States had to import sugar this year when bad weather hit crops. Mexico assigned some 550,000 tonnes of import quotas in 2009 and has a special trade pact with Nicaragua to provide a percentage of the quotas. Amador said Nicaragua will send 15,000 tonnes of sugar to Mexico in the upcoming cycle, which began in November and ends in May of next year. Mexico is estimating 2009/10 sugar production at around 5.1 million tonnes.
Raw sugar prices climbed to their highest level in 29 years on Friday in US futures trading, jumping to 27.08 cents a lb. Amador said high prices are a factor but not the main motivator behind the country's push to increase output because the price spike could be a temporary phenomenon but increased trade is seen more as a long-term situation.

Copyright Reuters, 2009

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