The San Pedro mill died. It was revived, but nobody wants to run it.

Summary and key findings

Key indicators for sugarcane in Veracruz and for national production.

Why Veracruz matters

Veracruz is Mexico's largest sugarcane producer and concentrates the most sugar mills in the country. When a mill stops operating, the cane from its supply zone must be relocated or is lost, with effects on producers and regional employment.

Veracruz sugar mills

Location and status of documented sugar mills.

Source: official CONADESUCA registry (sugar mill directory, 2025/26 season, updated January 19, 2026). Veracruz has 17 mills in the registry: 16 active and San Pedro under rescue, after announcing its closure in August 2026 and reverting it. Operating groups and municipalities come from the registry; map locations are approximate (municipal seat) and unverified, pending exact coordinates.

National sugar production by cycle

Production fell in recent cycles due to prolonged drought.

Veracruz historical trend (2015-2025)

Select a metric. Official series from SIAP's agricultural closing report.

The villain everyone points to

The easy story blames imports and fructose. The data says otherwise.

When sugar is scarce and its price rises, importing is the logical response to keep the country supplied. That is why purchases abroad grow right after a bad harvest, not before: they are the response, not the cause. And fructose, though it competes for the beverage market, has been a stable presence for years; if it did not move the price in a decade, it does not explain today's crisis.

Sugar smuggling ('huachicol azucarero')

Many growers point to another culprit: sugar that enters illegally or misdeclared and sinks the price. It is a real complaint, and it deserves careful measurement.

The best-documented mechanism is not open smuggling but the technical kind: sugar cleared through customs declared as food mixtures at 95 to 98 percent sugar, to pay a lower tariff. Because it does not enter recorded as sugar, it is absent from official import statistics, which is why it is so hard to measure and why the figures vary so widely. Industry (CNIAA) and a legislative analysis estimate hundreds of thousands of tonnes between 2022 and 2024, plus the operation of unlicensed mills in Puebla, Oaxaca and Veracruz. Among growers, claims of up to two million tonnes circulate that are unverified and far exceed that estimate. The government acknowledged the problem: in November 2025 it raised the tariffs on sugar imports.

Transparency: by definition, illegal trade is not measured in official statistics. The volume figures are estimates from industry and a legislative analysis (evidence level estimated or reported), not official measurements. The tariff, however, is an official figure (DOF).

The margin, not the market

The blow came from costs and the world price, not from fructose.

A grower does not live on the price, but on the margin: what is left after paying cutting, freight, fertilizer and wages. During the drought those costs climbed while the world price collapsed, and the scissors closed on the grower even as the cane price rose on paper. Add an uneven playing field: Mexico exports sugar under a quota to a single buyer, while fructose from that same country enters tariff-free.

Trade and policy risk

On top of that, the policy asymmetry: a single buyer, a shifting quota, and fructose that enters tariff-free.

Why San Pedro died

If it were the price, all would have fallen. San Pedro died of its own weaknesses: the worst sugar recovery of the 17 mills.

If the price were the culprit, all seventeen mills would have fallen together, because they all sell to the same market. They did not. San Pedro carried its own disadvantages: it received the least sweet cane, its factory extracted less sugar from each tonne, and it stopped for twice as long on breakdowns. Three weaknesses that stack up until milling becomes unviable. Its competitiveness killed it, not the market.

If the killer is competitiveness, who else is weak?

The efficiency record reveals the fragile mills. It does not predict closures: it says where to look.

The uncomfortable question is whether San Pedro was an isolated case or the next on a list that has not stopped. Comparing each mill's efficiency over the years separates those that had a bad year from those that have been weak for a long time. It is not a closure forecast: it is a map of where to look before it is too late.

San Pedro is not the first

Veracruz has lost mills for decades.

Exposure: what's at stake if a mill stops milling

The real impact of a closure on the cane and people of its supply zone.

Future and diversification

Where the opportunity is, if the risks are managed.

Three paths, and a decision still open

On September 10 the Presidency confirmed there is still no defined operator and named three options. They are, almost word for word, the three paths this report had been comparing.

For a few days it looked settled: the mill was going back to the federal government and Veracruz announced a decentralized public body to run it. On September 10 the Presidency put the matter back on the table: it is not decided whether the State takes it, whether workers run it as a cooperative, or whether another mill buys it. What matters is not which one wins but the condition imposed on all of them: operate under a market scheme, with no particular subsidy. That condition is exactly the yardstick this report proposes, because none of the three paths on its own fixes what sank the mill. And it is worth remembering that the private sale was already attempted and failed: the market has already given an answer about what it is worth to run this factory as it is.

Situation as of September 10, 2026: the decision is open. The three paths match the options the Presidency itself listed. Closing is not among them, but it is the implicit outcome if none works. Pros and cons are Pro-Latam analysis; figures come from the report's verified data.

Whoever takes it inherits this gap

The closure was reverted, but the operation still has no owner. The only certainty is what whoever takes it will receive: a factory that turns cane into sugar worse than any other in Veracruz.

Whether it is the State, a cooperative or another mill, the asset is the same and so are its numbers. Last season's are unanswerable: San Pedro milled more cane than the Veracruz average and was, at the same time, the last of the 17 mills at turning it into sugar. Volume was never the problem; conversion was. On top of that comes a new constraint: because public money is involved, the government announced that all output will go to the domestic market so as not to expose Mexico to a US trade complaint over subsidies. In other words, whoever comes in does so with the least efficient factory in the state and without the option to export. That is why the presidential condition of operating under a market scheme is the acid test: if cost per tonne does not fall, the loss does not disappear, it just changes pockets, and if that pocket is public, it becomes a recurring budget line.

Pro-Latam analysis of verified data (Infocana/CONADESUCA, 2024/2025 season) and reported facts. As of September 10, 2026 there is no defined operator and no published terms (investment, timetable and final scheme); there is no public figure for the rehabilitation cost either. We will update when they are known.

How we read the evidence

Every figure here is classified by evidence tier and traced to its source.