The United States now expects to import only 499,000 short tons (ST) of sugar from Mexico, down from an estimate of 666,000 ST in March.
Mexico has had two years of small sugar cane crops that reduced the amount it can provide to the United States under a bilateral trade agreement.
The USDA reduced its estimate for Mexico's sugar production in the 2023/24 cycle to 4.57 million metric tons from 4.74 million forecast in March and 5.22 million recorded in the 2022/23 campaign.
The USDA change also comes amid complaints from the U.S. sugar industry that Mexico was exporting sugar in excess of its surplus, which is the amount left after accounting for local production and use.
The USDA raised its estimate on US sugar imports that will pay the highest tariff to 855,000 ST from 715,000 ST in March, meaning more of the country's sugar supply will be priced higher.
The level of sugar supply in the United States changed little, with a stock-to-use ratio of 13.5%.
