Tequila prices in Mexico should fall this year. The president of Mexico's National Chamber of Tequila Industry, Eduardo Orendain, said earlier this week that prices for the spirit should decrease by 25% year-on-year in 2004. Orendain credits the potential fall to the decrease in prices of agave, the main material for tequila production, and its greater availability on the market.

Agave has been in short supply in the past two years, leading to an increase in prices and a decrease in consumption and production. Mexico's production of tequila fell last year to 140m litres from 191m litres in 1999, as the price of agave soared to 16 pesos per kilogram. Prices in 2004 are expected to be between 3 pesos and 5 pesos.

Tequila production has steadily fallen in the last four years, while Mexico's 2003 tequila consumption fell by 27% year-on-year.