GUATEMALA CITY (Commodity Online) : Central American republic of Guatemala said its Sugar exports to neighbor Mexico surged to close to 200,000 metric tons this fiscal.

According to Guatemalan Sugar Growers Association, this compares to last year where Guatemala didn't export one single ton of sugar to Mexico from the 2008-09 harvest.

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The surge in Guatemalan sugar shipments to Mexico comes as Mexico's 2009-10 harvest has fallen behind the year-ago pace by more than 15%, widening the local supply shortage created by Mexico's harvest last year that also ended sharply below expectations.

The sugar crop year runs from Nov. 1 to Oct. 31 the following year in both countries.

Mexico's Economy Ministry last month said it had approved an import quota for up to 250,000 metric tons of Sugar in order to meet the local demand despite the growing shortfall in current crop.

The poor results in the Mexico's last harvest led the government to issue a series of sugar import quotas, after domestic prices surged to historic highs on fears over a supply shortage, which also led to higher consumer inflation.

In Guatemala, however, the demand from Mexico has led to a heated debate as many industry players say much larger quantities are being shipped illegally to Mexico by smugglers taking advantage of poor border control, analysts said.

This has been reported to be behind a sharp rise in domestic Guatemalan sugar prices, they said.

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