Sugar users say trade case costs $2.4 billion

by Ron Sterk
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KANSAS CITY — In a white paper released Oct. 23, the Sweetener Users Association said the ongoing sugar trade case against Mexico drove refined sugar prices from 26.5c per lb in March to 37.5c in September and would cost consumers $2.4 billion during the current 2014-15 (October-September) marketing year.

“If prices remain at 37.5c, that extra 11c per lb will cost consumers an additional $2.4 billion over the course of the fiscal year that just started on Oct. 1,” said Tom Earley, vice-president of Agralytica Consulting and author of the paper. “Even if the United States and Mexico work out some agreement to restrict Mexico’s sugar exports to the United States in the coming months, the implicit shorting of the market and uncertainty about how our supply deficit will be met is expected to keep U.S. sugar prices much higher than they would have been otherwise.”

U.S. sugar producers filed petitions with the Department of Commerce and International Trade Commission March 28 claiming Mexico was dumping subsidized sugar on the U.S. market at a cost of $1 billion to U.S. sugar producers in the fiscal year that just ended. So far D.O.C. and I.T.C. preliminary rulings have supported the U.S. producers’ claims. The D.O.C. preliminarily imposed countervailing duties from 2.99% to 17.01% on sugar imports from Mexico as of Sept. 2. The D.O.C. is set to decide on antidumping duties on Oct. 24, with the decision expected to be made public on Oct. 27.

Mexico, meanwhile, has been pushing for a suspension agreement, that according to press reports would include an annual export minimum of around 1 million tonnes in lieu of U.S. duties.
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