US sugar producers: Mexico dumps sugar; threatens domestic production

The American Sugar Coalition, comprising domestic sugar cane and beet and refining interests, filed on March 28 an antidumping and countervailing duty petition against Mexico with the Department of Commerce and the International Trade Commission (ITC). They maintain that Mexico is dumping subsidised sugar, and are seeking duties of 62.44 percent for raw sugar and 44.88 percent for refined sugar. It was filed on March 18, 2014.

The ITC said it will investigate the issue and a decision is expected by May 9 on whether Mexican sugar imports harm or threatens to harm the US domestic sugar industry.The US producers claim that Mexico “dumps” sugar at almost a 45 percent less than the cost of production, something that last year led to a doubling of imports. As a result, they say, sugar prices fell to levels not seen in almost a decade, with estimated income losses of USD 1 billion in 2013-14. The US sugar system has strict controls on imports, except from Mexico, a country that can export unlimited amounts on duty-free access under the North American Free Trade Agreement (NAFTA).

Some US sweetener industrial users as well as the Corn Refiners Association do not agree with the allegation, and said that the current trade of sweeteners between the US and Mexico, that is sugar and high fructose corn syrup, should be maintained.

On their side, the Mexican sugar industry has rejected the allegation saying that prices have only returned to normal levels, something that is happening the world over. They also say that, in coordination with US authorities, they have not shipped sugar to the US to prevent oversupply and the deterioration of prices. They also warned that the ITC investigation is to please a sector that enjoys inexpensive loans, that benefits from import controls (except under NAFTA), and that has enjoyed good prices in recent years. They added that Mexico might retaliate by investigating the US exports of high fructose corn syrup, which is a direct sugar competitor in some industrial applications.

According to the US sugar program, sugar producers can contract loans using the sugar (to be produced) as collateral. In case they don’t sell the sugar, they can deliver it to the US Department of Agriculture. Last year, the Credit Commodity Corporation (CCC) [1]bought or acquired through forfeiture some 640,000 tonnes of sugar, at a net cost of some USD 258.7 million. In other words, the CCC sold sugar to ethanol producers at a loss.

 

[1] The CCC is a financing institution for USDA’s farm programs, which includes price and income support, commodity export credit and agricultural export subsidies.

Permanent link to this article: http://www.iuf.org/sugarworkers/us-sugar-producers-mexico-dumps-sugar-threatens-domestic-production/

1 comment

    • Miriam Wanyama on June 4, 2014 at 1:16 am

    The same thing happened in Kenya making the Sugar Millers to sell their Sugar at a throw away price.
    It later on contributed to many problems Workers and Farmers are facing. For example Workers have not had a salary increment for the past 21/2 years because of the loses realized after the sell of Sugar. Farmers on the other hand have to accept reduced pay also due to low prices of Sugar.
    In Kenya, the Parliamentary Agricultural Committee intervened recently and we are hoping for the best.
    The same should happen to our Comrades in the US because the people involved in the curtails are Senior Government Officials!

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