Keywords:

Econometric models

Sugarcane by-products

Co-product valuation

Potential supply of lactic acid as a diversication alternative of the sugar agro-industry in

Veracruz, Mexico

Oferta potencial del ácido láctico como alternativa de diversicación de la agroindustria azucarera

en Veracruz, México

Potencial oferta de ácido lático como alternativa para diversicação da indústria açucareira em

Veracruz, México

University of Zulia, Faculty of Agronomy

Bolivarian Republic of Venezuela

Colegio de Postgraduados Campus Córdoba, Km 348

Carretera Federal Córdoba-Veracruz, Congregación Manuel

León, Municipio de Amatlán de los Reyes, Veracruz,

México, C.P. 94953.

CONACYT–Colegio de Postgraduados Campus Córdoba,

Km 348 Carretera Federal Córdoba-Veracruz, Congregación

Manuel León, Municipio de Amatlán de los Reyes, Veracruz,

México, C.P. 94953.

Tecnológico Nacional de México/Instituto Tecnológico

Superior de Tierra Blanca, Av. Veracruz s/n., 95180 Tierra

Blanca, Veracruz, México Tierra Blanca, Veracruz, México.

Consejo Nacional de Ciencia y Tecnología (CONACYT)–

Universidad Autónoma de San Luis Potosí, Sierra Leona

550, Lomas 2da Secc., 78210.San Luis Potosí, México, C.P.

Received: 13-01-2022

Accepted: 19-07-2022

Published: 04-08-2022

Abstract

In Mexico, sugarcane (Saccharum spp.) is one of the most

notable agrifood crops, due to the economic importance it

represents, sucrose and ethanol are systematically produced from

it. However, a modernization scheme is currently required through

productive diversication, valorizing and taking advantage of the

generated co-products. In this scheme, the production of lactic

acid is proposed, which generates added value and has potential

demand in different industries such as food and pharmaceuticals.

Therefore, the objective of this research was to evaluate factors

that determine potential supply of lactic acid, if it were produced

using bagasse and molasses generated in 18 sugar mills located in

four sugarcane regions in Veracruz, Mexico. Statistical methods of

panel data analysis were applied by estimating ve econometric

models, using the factors that can determine such supply. Analysis

results indicated that the four sugarcane regions have lactic acid

production potential, highlighting the Papaloapan-Gulf (2.6 million

t) and Cordoba-Gulf (1.6 million t) regions. Factors that inuenced

or determined supply were: harvest duration, lactic acid import

price, the number of co-products and by-products, the harvested

area and the average of schooling level. In conclusion, the sugar

agroindustry in Veracruz has the potential to diversify its production

through the co-production of lactic acid in the context of a decit

trade balance.

Jorge Francisco Castillo-Martínez

Francisco Hernández-Rosas

María Antonieta Ríos-Corripio

Elizabeth del Carmen Varela-Santos

Manuel Alejandro Lizardi-Jiménez

Ricardo Hernández-Martínez

Rev. Fac. Agron. (LUZ). 2022, 39(2): e223939

ISSN 2477-9407

DOI:

https://doi.org/10.47280/RevFacAgron(LUZ).v39.n3.05

Socioeconomics

Associate editor: Dra. Fatima Urdaneta

This scientic publication in digital format is a continuation of the Printed Review: Legal Deposit pp 196802ZU42, ISSN 0378-7818.

Rev. Fac. Agron. (LUZ). 2022, 39(3): e223939. July - September. ISSN 2477-9407.

2-6 |

Resumen

En México la caña de azúcar (Saccharum spp.) es uno de los cultivos

agroalimentarios más notables, debido a la importancia económica

que representa, a partir de la cual se produce sistemáticamente

sacarosa y etanol. Sin embargo, actualmente se requiere un esquema

de modernización mediante la diversicación productiva, valorizando

y aprovechando los coproductos que se generan. En este esquema se

propone la producción de ácido láctico, el cual genera valor agregado

y tiene demanda potencial en diferentes industrias tales como

alimentaria y farmacéutica. Debido a esto, el objetivo del presente

trabajo fue evaluar los factores que determinan la oferta potencial del

ácido láctico, si fuera producido utilizando el bagazo y melaza que

se generan en 18 ingenios azucareros ubicados en cuatro regiones

cañeras en Veracruz, México. Se aplicaron métodos estadísticos de

análisis de panel de datos mediante la estimación de cinco modelos

econométricos, utilizando los factores que pueden determinar dicha

oferta. El resultado de los análisis indicó que las cuatro regiones

cañeras tienen potencial productivo de ácido láctico resaltando las

regiones Papaloapan-Golfo (2,6 millones de t) y Córdoba-Golfo

(1,6 millones de t). Los factores que inuenciaron o determinaron

la oferta fueron: la duración de la zafra, el precio de importación del

ácido láctico, número de coproductos y subproductos, la supercie

cosechada y el grado promedio de escolaridad. En conclusión la

agroindustria azucarera veracruzana tiene potencial para diversicar

su producción por medio de la coproducción de ácido láctico en el

contexto de una balanza comercial decitaria.

Palabras clave: Modelos econométricos, subproductos de la caña de

azúcar, valoración de coproductos.

Resumo

No México, a cana-de-açúcar (Saccharum spp.) é uma das culturas

agroalimentares mais notáveis, devido à sua importância econômica,

da qual são produzidos sistematicamente sacarose e etanol. No entanto,

atualmente é necessário um esquema de modernização por meio da

diversicação produtiva, valorizando e aproveitando os coprodutos

gerados. Neste esquema, propõe-se a produção de ácido lático,

que gera valor agregado e tem potencial de demanda em diferentes

indústrias, como alimentícia e farmacêutica. Devido a isso, o objetivo

deste estudo oi o de avaliar os fatores que determinam o potencial de

oferta de ácido lático, se for produzido com bagaço e melaço gerado

em 18 usinas de açúcar localizadas em quatro regiões canavieiras em

Veracruz, México. Foram aplicados métodos estatísticos de análise em

painel de dados estimando cinco modelos econométricos, utilizando

os fatores que podem determinar a referida oferta. Os resultados das

análises indicaram que as quatro regiões canavieiras apresentam

potencial produtivo de ácido lático, com destaque para as regiões

Papaloapan-Golfo (2,6 milhões de t) e Córdoba-Golfo (1,6 milhão

de t). Os fatores que inuenciaram ou determinaram a oferta foram:

a duração da safra, o preço de importação do ácido lático, o número

de coprodutos e subprodutos, a área colhida e a escolaridade média.

Em conclusão, a indústria açucareira de Veracruz tem potencial para

diversicar sua produção através da coprodução de ácido lático no

contexto de uma balança comercial decitária.

Palavras-chave: Modelos econométricos, subprodutos da cana-de-

açúcar, avaliação de coprodutos.

Introduction

In Mexico, the sugarcane (Saccharum spp. ) is very important

economically, given that it currently ranks sixth in the world in

sugarcane production, with a volume of 51.3 million tons of raw cane

milled in the last cycle; according to the Secretariat of Agricultural,

Rural and Fishing Development (SEDARPA, 2019), Veracruz

ranks rst in production at the national level and according to the

National Committee for the Sustainable Development of Sugarcane

(CONADESUCA, 2021), 18 of the 51 national sugar mills are located

in this entity. However, the co-products and by-products generated in

the sugarcane agroindustry (boiler ash, straw and bud, combustion

gases, vinasse, cachaza, molasses and bagasse among others) are not

valued, since industrial activity is limited to the production of sucrose

and ethanol, giving an opportunity to the productive diversication of

this agroindustry (Aguilar-Rivera et al., 2017).

The productive innovation adopted in the sugar agroindustry

(biorenery concept) by countries such as Australia (Bell, 2017),

Brazil (Albarelli et al., 2018) and Thailand (Silalertruksa et al.,

2017) has made it possible to provide added value to the co-products

and by-products generated, this strategy improves the marketing

conditions, quality and variety of the products, increasing their value

at each stage of their production and is important because that implies

jobs generation and sustainable processes developing by investments

(Llanes-Gil-López et al., 2017). Value-added products that can be

produced are biofuels such as biohydrogen, ethanol, carbon bers,

cellulose, animal feed, paper, detergents, lubricating oils, paints,

electricity, lactic acid and bioplastics, among others (Aguilar-Rivera,

2017).

Lactic acid is a little explored option that has a wide range of

applications in the food, cosmetics, chemical industry and as a

precursor molecule that can produce biodegradable biopolymers such

as polylactic acid (Llanes-Gil-López et al., 2017).

The above provides an alternative to the pollution generated

by petroleum-derived plastics since according to the Ministry

of Environment and Natural Resources (SEMARNAT, 2018)

approximately 300 million tons of plastic waste are produced annually

and, in the Mexican context, according to Greenpeace (2019), more

than seven million tons of plastic are produced in Mexico, 48% is

used for packaging production which are mostly discarded and

Veracruz is the fourth state that generates the most urban solid waste

in the countrie (SEMARNAT, 2020). This problem accentuates the

need to offer biodegradable products generated from productive

diversication.

The production of lactic acid from molasses and bagasse produced

in the sugar agroindustry could be a convenient diversication

alternative in Mexico. Therefore, the objective of this study was to

evaluate factors that determine the potential supply of lactic acid if

it were produced using bagasse and molasses generated in 18 sugar

mills located in four sugarcane regions in Veracruz, Mexico.

Materials and methods

An evaluative research with a longitudinal evolutionary design

was carried out to estimate the supply of lactic acid and weight the

incidence of the factors that intervene in it, records were taken of the

production of sugarcane by-products of the sugar mills of Veracruz

for a period of 10 years (2010-2020). Likewise, social, productive and

macroeconomic data from documentary sources were taken.

This scientic publication in digital format is a continuation of the Printed Review: Legal Deposit pp 196802ZU42, ISSN 0378-7818.

Castillo-Martínez et al. Rev. Fac. Agron. (LUZ). 2022, 39(3): e2239393-6 |

Study area

The researh was carried out considering four sugarcane regions of

the state of Veracruz that groups 18 sugar mills (gure 1); Córdoba-

Golfo region: Central El Potrero, Central La Providencia, Central

Motzorongo, Central Progreso, Central San Miguelito, Constancia,

San José de Abajo and San Nicolás located between parallels 17°

48’/19° 8’ N and meridians 96° 1’/97° 2’ W; Papaloapan-Golfo

region: CIASA, Modelo, La Gloria, Mahuixtlán, San Cristóbal, San

Pedro and Tres Valles located between parallels 17° 42’/19° 46’ N

and meridians 94° 52’/96° 57’ W; Central region: El Carmen located

between parallels 18° 8’/19° 29’ N and Meridians 96° 43’/99° 24’ W

and Northeast region: El Higo and Pánuco located between parallels

21° 31’/23° 8’ N and Meridians 97° 59’/99° 31’ W.

Figure 1. Sugar mills by sugarcane region in the state of Veracruz.

Source: Own elaboration.

Data

To analyze regions potential, a graph was constructed from a

database of production, by-products and co-products generated in

the sugar mills, taking unto account period from 2010-2011 to 2019-

2020, according to CONADESUCA (2021). The potential supply of

lactic acid was analyzed by projecting its production with bagasse

and molasses considering theoretical yields reported by Alves de

Oliveira et al. (2019), for lactic acid produced from bagasse and by

Anaya-Reza and López-Arenas (2018), for lactic acid produced from

molasses in order to project the possible diversication through value

addition of the four sugarcane regions in the studied period.

Likewise, information was collected on the export and import

volumes of lactic acid in Mexico through the tariff information

system via the internet (SIAVI, 2020), and the trade balance of lactic

acid was analyzed.

Variables selection

It were selected context socioeconomic and productive variables

(average level of schooling of the population, real sugarcane price,

harvested area and sugarcane yield) of municipalities where the

sugar mills are located, in order to evaluate factors that determine

the supply of lactic acid, using ofcial information from the National

Institute of Statistics and Geography (INEGI, 2020) and the Agrifood

and Fisheries Information Service (SIAP, 2020). The average

schooling level is a socioeconomic variable of interest that is related

to production, according to Licea (2019), there is a direct relationship

between education and salary; rural populations with higher level of

schooling choose to develop non-agricultural activities and migrate to

other states in order to increase family income, which has an impact on

the production of agricultural activities. In turn, according to reported

by Montesillo-Cedillo (2017), variables such as price, planted area

and yield are directly related to the product supply.

In turn, productive variables were selected (harvest days, number

of products, co-products and by-products and time trend for the sugar

agroindustry in the study region according to CONADESUCA,

(2021). These types of variables are related to product diversication

(Aguilar-Rivera 2017).

By means of collected data from the tariff information system

by internet (SIAVI, 2020), macroeconomic variables were selected

(import price of lactic acid in Mexico and imports volume). According

to reported by Benítez-Ramírez et al. (2010) and Rebollar-Rebollar et

al., (2019) these types of variables directly inuence product supply.

Likewise, dichotomous type variables were created for the region

with the highest production.

The selected variables were checked for multicollinearity by

estimating the variance ination factor (VIF), according to Kothari

(2015) and Salmerón-Gómez et al. (2020) variables with a variance

ination factor (VIF) greater than 10 present a signicant degree of

collinearity.

Data analysis

Data analysis was performed using Stata® ver 12.0 statistical

software (Girón 2017; Iglesias and Fernández, 2022) to build simple

linear regression econometric models (LRM), mixed effects (MEM),

logistic at 10th percentile (LM10), logistic at 25th percentile (LM25)

and logistic at 50th percentile (LM50), which were used to evaluate

factors that determine the potential supply of lactic acid through an

analysis. Finally, the Akaike information criterion (AIC) was used

since it reects the conformity of the model with the observed data

and the Bayesian information criterion (BIC) because is the probable

(selected) model that best ts the data; these criteria are widely

used in the comparison and optimal selection of models choosing as

adjusted model, i.e. in balance goodness of t and parsimony, the one

with minimum values of AIC and BIC (Cavanaugh and Neath, 2019).

Figure 2, shows the procedure of the research which summarizes all

the methodology previously explained.

Figure 2. Research procedure for evaluating factors that

d e t e r m i n e t h e p o t e n t i a l s u p p l y o f l a c t i c a c i d .

Source: Own elaboration.

This scientic publication in digital format is a continuation of the Printed Review: Legal Deposit pp 196802ZU42, ISSN 0378-7818.

Rev. Fac. Agron. (LUZ). 2022, 39(3): e223939. July - September. ISSN 2477-9407.

4-6 |

Results and discussion

The inventory of products, by-products and co-products

of the sugar agroindustry in the region indicated that the most

generated products are bagasse (1287.63 thousand t), cachaza

(524.37 thousand t), sucrose (469.1 thousand t), molasses (179.67

thousand t) and ethanol (460.49 thousand L). With the inventory

analysis (gure 3) and valorization information, it was decided to

perform an analysis with econometric models with bagasse and

molasses data as reported by Alves de Oliveira et al. (2019) and

Anaya-Reza and Lopez-Arenas (2018). The trend of bagasse and

molasses generation (production cycle 2010-2011 to 2019-2020),

and the projection of lactic acid production volumes if they were

produced from these co-products can be observed in Figure 3. The

theoretical volumes of lactic acid were calculated in reference to the

yields reported by Alves de Oliveira et al. (2019) for bagasse and

Anaya-Reza and Lopez-Arenas (2018) for molasses.

As can be seen in gure 3, the Papaloapan-Golfo and Córdoba-

Golfo sugarcane regions show a greater potential for lactic acid

production from bagasse and molasses co-products, with a linear

trend that projects a possible increase in production volumes over

time, demonstrating that mills belonging to these regions can

consider diversication through sustainable production of lactic

acid, in addition to the products they traditionally produce.

Figure 3. Potential production of lactic acid from co-products

of the sugar agroindustry in the sugarcane regions of

Veracruz, 2010-2011 to 2019-2020 cycles. a) Bagasse,

b) Molasses, c) Theoretical volume of lactic acid from

bagasse and d) Theoretical volume of lactic acid from

molasses.

Source: Prepared by the authors with data from CONADESUCA (2020).

International lactic acid trade in Mexico

In addition, the international trade situation of lactic acid in

Mexico faces a trade balance decit, since purchases of this product

abroad exceed sales abroad, as can be seen in gure 4. The results

show the opportunity for diversication by promoting production

in the domestic market and decreasing dependence on imports from

abroad.

Figure 4. History of international trade of the lactic acid product

in Mexico, period 2010-2020.

Source: Prepared by the authors with data from SIAVI (2020).

According to the Observatory of Economic Complexity (OEC,

2020), Mexico exported around $872,000 USD in lactic acid, its

salts and esters in 2020, which placed it as the 24th exporter in

the world, its main destination was Egypt ($349,000 USD), the

United States ($304,000 USD) and Singapore ($63,400). It was

also the 11th importer ($17,800,000 USD) of lactic acid in the

world, indicating that it is a product in demand in Mexico, showing

a window of opportunity to supply the domestic requirement of the

product with lactic acid produced from sugar cane by-products and

co-products.

Factors determining the potential supply of lactic acid

The analysis of variables using econometric models was carried

out with the objective of evaluating the factors that determine the

potential supply of lactic acid in Veracruz. As shown in Table 1,

following the criteria for selection of the model that best ts the

observed data according to Cavanaugh and Neath (2019), the MEM

model shows the best t because it has the lowest AIC and BIC, and

according to Raq and Kazmi (2017) it is dened as follows:

Where: Y is the vector of known observations, with mean E

(y)=Xβ;

β is the unknown vector of xed effects

u is the unknown vector of random effects, with mean E(u)=0

and variance-covariance matrix var (u)=G;

is the unknown vector of random errors, with mean E( )=0 and

variance var( )=R;

X and Z are known design matrices relating observations y to β

and u respectively.

Raq and Kazmi in (2017) indicated that MEMs integrate xed

effects and random effects and describe the relationship between

the response variable and the independent variable(s). Similarly,

Gilbert et al. (2013), used a MEM concluding that agricultural

exports have mixed effects on economic growth in Cameroon.

In this research, models studied to determine the factors that

dene the potential supply of lactic acid in Veracruz show that the

factor Days of harvest is highly statistically signicant at 1% in the

MEM model with the highest adjustment, as well as in the LRM,

LM10 and LM50 models, indicating that the greater the number

of days of harvest, the greater the probability of producing lactic

acid. Due to the availability of sugarcane and by-products (bagasse

and molasses) derived from the industrial process is greater as the

number of harvest days increases.

 =  +  +∈ 1

∈ 1

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Castillo-Martínez et al. Rev. Fac. Agron. (LUZ). 2022, 39(3): e2239395-6 |

 =  +  +∈ 1

∈ 1

On the other hand, the factor Price of lactic acid imports in

Mexico turned out to be highly statistically signicant in the MEM

model and in the LRM and LM10 models but it showed a lower level

of statistical signicance at 5% and 10%, respectively, those results

allowed to selected MEM as the model used for the analysis.

Table 1. Econometric models of factors that determine the potential supply of lactic acid in Veracruz.

Variable

VIF

LRM MEM LM10 LM25 LM50

Coecient P-values Coecient P-values Coecient P-values Coecient P-values Coecient P-values

Days of harvest (Day) 1.28 1.004*** P<0.01 1.003*** P<0.01 14.83*** P<0.01 70.37 NS 36.12*** P<0.01

Number of co-products and

by-products

1.53 0.0202 NS 0.0204 NS 4.508** P<0.05 9109 NS 1655 NS

Average grade of schooling

(Years)

1.33 0.053 NS 0.0531 NS 0.836* P<0.1 11.99 NS 7.159** P<0.05

Average rural cane price

(Mexican pesos)

2.00 0.0879 NS 0.0878 NS -1361 NS -6132 NS -4699 NS

Volume of lactic acid imports

(t x 1,000,000)

6.60 -0.103 NS -0.103 NS 4164 NS -1188 NS 3021 NS

Papaloapan Region (0 or 1) 1.25 0.345 NS 0.344 NS 3302 NS 18.48 NS 3328 NS

Harvested area (ha) 1.41 0.0182 NS 0.0191 NS 5.052** P<0.05 -3047 NS 1147 NS

Price of lactic acid imports

(Mexican pesos)

3.44 0.340** p<0.05 0.341*** P<0.01 17.82* P<0.1 0 NS 0 NS

Cane yield (t.ha

-1

) 1.49 0.124 NS 0.119 NS -3561 NS -15.75 NS 3490 NS

Constant N/A “-4.153**” p<0.05 -4139 NS “-333.6** P<0.05 -345.9 NS “-264.9* P<0.1

Number of observations N/A 160 160 160 160 160

Information criteria

Akaike (AIC)

N/A 216.49 -167.2 88.22 65.3 79.45

Information criteria

Bayesian (BIC)

N/A 250.32 -127.2 125.1 99.13 113.3

***: Signicant at 1% and P-value=P<0.01, **: Signicant at 5% and P<0.05, *:Signicant at 10% (Gilbert et al. 2013) and P<0.1; LRM=Simple linear regression model;

MEM=Mixed effects model; LM10=Logistic model at 10th percentile; LM25=Logistic model at 25th percentile; LM50=Logistic model at 50th percentile; NS=Not

signicant; VIF=Variance ination factor; N/A=Not applicable.

Results suggests that the higher import price of lactic acid

increases in Mexico, the higuer probability of producing lactic acid

domestically increases, which could reduce the volume of imports of

this co-product. This result agrees to reported by Benítez-Ramírez et

al. (2010), who analyzed the supply and demand of beef carcasses in

Mexico, using a predictive model.

In the same way, Rebollar-Rebollar et al. (2019), found similar

results, when determining the effect of imports on the main economic

and technological variables supply of chicken meat, concluding that

the higher the import price, the higher the volume of chicken meat in

Mexico.

Additionally, the factors Number of co-products and by-

products, harvested area and Average grade of schooling, presented

a lower level of statistical signicance in LM10 at 5%, 5% and 10%

respectively, suggesting that the greater the number of co-products

and by-products produced in a mill, the greater the probability of

diversifying its production, and the greater the harvested area, the

greater the probability of producing lactic acid due to the availability

of sugar cane.

Finally, the higher schooling level average of the population

where the mills under study are located, the higher probability of

producing lactic acid coproduct, similar results to those reported by

Aguilar-Rivera (2017), who considered environmental factors such as

harvested area, technological factors (installed and milling capacity

of sugar mills) and socioeconomic factors such as level of schooling

determined that the Huasteca sugarcane region has an average

diversication index of 99.78% (high).

Conclusions

The analysis of productive diversication of the sugar

agroindustry in Veracruz showed that the four regions analyzed

have potential for diversication, with the Papaloapan-Gulf (2.6

million tons) and Córdoba-Gulf (1.6 million tons) regions standing

out. In addition, bagasse and molasses were identied as the most

suitable co-products for the production of lactic acid, with which the

productive diversication of the State’s sugar agroindustry can be

activated, considering the decit trade balance situation that Mexico

faces for this product.

Harvest days and the import price of lactic acid were the main

factors that determined supply; other factors, such as the number of

co-products and by-products, harvested area and average level of

schooling were also determinants of supply in other models studied,

but with a lower level of statistical signicance.

This scientic publication in digital format is a continuation of the Printed Review: Legal Deposit pp 196802ZU42, ISSN 0378-7818.

Rev. Fac. Agron. (LUZ). 2022, 39(3): e223939. July - September. ISSN 2477-9407.6-6 |

According to the results, it is suggested to carry out tests of

lactic acid production using bagasse and molasses as carbon sources,

considering its potential for an alternative system of diversication of

the sugar agroindustry in Veracruz, Mexico.

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