Tequila production in January leapt by 18% year-on-year, according to figures released over the weekend. The amount of Tequila exported in January, however, fell by 8.3% year-on-year, to 7.7m litres.

The president of the national chamber of the tequila industry CNIT, Eduardo Orendain, who announced the figures, also predicted a recovery and consolidation of the Tequila industry in Mexico this year.

In January, Orendain said that Tequila prices should fall by 25% year-on-year in 2004. Orendain credited 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 fallen steadily in the last four years, while Mexico's 2003 Tequila consumption fell by 27% year-on-year.