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Mexico lifts

sugar price controls

MEXICO CITY: Mexico Friday removed decade-old controls on domestic sugar prices in a move that could spark inflation and bring more fluid trading in the commodity.

Mexico's sugar industry, directly employing 350,000 people and last year producing a record crop of 4.28 million metric tons, has suffered since the government sold it off in the late 1980s.

Given the past restrictions on domestic prices, financing new investments has been impossible because virtually all production goes to satisfy Mexicans' notorious sweet tooth.

Industrialists have shut down outdated mills since privatisation, leaving just 61 operating.

Albino Lara Valerio, director general of the National Sugar Chamber, said recently that another 20 mills could go bankrupt if the government did not give relief to the sector.

Industry specialists believe the move will provoke higher inflation, since sugar is a basic element in industries such as bottling and food processing.-Reuter