Mexico plans to lower import duties on sugar later in 2005 for non-quota shipments from the U.S. and countries not in the North American Free Trade Agreement, or Nafta, an official said Monday.



The lowering of the duties is part of a series of changes in government policies related to the management of sweetener and sugar markets, the official told Dow Jones Newswires, speaking on condition of anonymity.



New import duties on raw sugar will be set at $339 per metric ton while duties on white sugar of Icumsa-quality grade 45 will be set at $360 per ton, he said. Import duties for both raw and refined sugar currently are now $395/ton.



"It's not that we are going to import more sugar at all, but the government wants to set a roof in terms of the domestic (retail) prices so that they can only go to so high before it would invite more imports," said the official.



The Mexican government surprised and angered the local sugar industry in 2003 when it issued an import quota for 112,000 tons, the first imports in a decade after Mexico turned a net exporter in the early 1990s.



But the government defended its decision to allow the imports and issued a second import quota in late 2004 for 123,457 metric tons, arguing that domestic retail prices otherwise would rise too much on speculative trade.



The official said the new duties also are part of a move to streamline duties under the Nafta trade agreement on sugar to which Mexico and the U.S. are signatories. Canada, although a partner in Nafta, did not sign the sugar chapter of the agreement and hence is outside the special duty-free quota and low duties applied under the tariff rate quota program of Nafta, said the official.



Canada and all other countries will be subject to the new tariff rate quota, or TRQ, tariffs, which are expected to be officially implemented later this year.



The new Mexican duties for white sugar will be slightly lower than those set by the U.S., where refined sugar imports currently stand at a duty of $366 per ton, he said. The duty for raw sugar is the same as the U.S. at $339 per ton.