Otro Tequila

News directly from Jalisco's famed tequila regions

Thursday, August 17, 2006

Agave glut continues

Once again, Jalisco's agave farmers complained about the low prices they receive for their crops and threatened to take action against various tequila producers, whom the agaveros (growers) accuse of welshing on a deal to pay more. According to an article in today's Publico, the growers receive 60 centavos per kilogram. The break-even price is 2.50 pesos. The tequila distillers allegedly also haven't purchased as much agave as they promised.

Much of the problem is caused by supply and demand issues. Back when agave fetched 16 pesos per kilogram, the farmers - and many speculators - went on a planting binge. Now they're left hoarding tons of agave the tequila industry doesn't need.

The Jalisco rural development estimates the glut will persist until at least 2009, when ironically enough, a shortage could occur.


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