ORLANDO, FLA. – Global sugar outturn is expected to decline in 2016 and beyond, but the near-term outlook for the North American Free Trade Agreement region remains murky because of the unsettled trade rift between the United States and Mexico. The U.S. Department of Agriculture made clear its preferred outcome at the International Sweetener Symposium in Orlando, Fla., this week.

Michael Scuse, U.S.D.A. Under Secretary for Farm and Foreign Agricultural Services, said at the Colloquium’s opening session Feb. 9 the U.S.D.A. “would like to see a negotiated agreement to allow Mexico to export all the sugar we need duty free.” He said the U.S.D.A. supports agreements signed Dec. 19, 2014, by the U.S. Department of Commerce and Mexico that suspended antidumping and countervailing duties averaging 56% on exports of Mexican sugar to the United States.

Barb Fecso, director of Dairy and Sweetener Analysis group in the U.S.D.A.’s Farm Service Agency, speaking at the Colloquium’s next to last session Feb. 11, iterated Mr. Scuse’s stance, saying, “We would like a suspension agreement to stay in place.” She said the U.S.D.A. expected to be able to manage the U.S. sugar program at zero cost over the next 10 years based on an agreement that maintains a U.S. sugar ending stocks-to-use ratio minimum of 13.5%. “That’s incentive to support a suspension agreement,” she said.

The American Sugar Alliance, which represents sugar producers, noted the significance of running the U.S. sugar program at zero cost and noted U.S.D.A. long-term projections released Feb. 11 showing no Commodity Credit Corp. disbursements due to sugar loan forfeitures from 2014-15 through 2024-25 based on a managed sugar agreement with Mexico. The U.S.D.A. spent $259 million on sugar loan forfeitures in 2013.

“If the estimates hold true, it will mean that sugar policy would have run without cost for 22 of 23 years,” said Jack Roney, an economist with the A.S.A.

But some questioned the 13.5% ratio, noting the U.S.D.A. previously used a range of 13.5% to 15.5% in making import adjustments. Ms. Fecso said the 13.5% was a minimum and “doesn’t mean we can’t go higher.”

Ms. Fecso said she realized sugar users, as well as Mexico, preferred a return to free trade under NAFTA with no suspension agreement. She said the suspension agreement would provide more certainty of supply.

Meanwhile, Mike Gorrell, head of Louis Dreyfus Commodities’ Imperial Sugar Company, one of the two U.S. cane refiners that requested the U.S. International Trade Commission review the Dec. 19 suspension agreements, said the 13.5% stocks-to-use ratio was too low and suggested the U.S.D.A. use 15.5% “and see how the market functions.”

On a global basis, Mr. Gorrell said he expected world raw sugar prices to trade between 14c and 20c a lb in coming months, which was below cost of production in many countries. He said he expects global supplies to be deficit in 2015-16 and for deficits to increase over the next several years.

Craig Ruffolo, partner – global sweetener specialist, McKeany-Flavell, said at the Colloquium that a stocks-to-use ratio below 13.5% was bullish for sugar prices while one above that level tended to be bearish. He noted only about 25% of U.S. sugar needs had been booked for 2016.

Much of the attendees’ focus and discussion at the Colloquium was on the trade rift and potential outcomes of the I.T.C. review. Generally, a considerable amount of sugar trade is conducted on the sidelines at the Colloquium. This year there was a lot of talking but only a limited amount of business completed, mainly because of the uncertainty related to the trade case.

“With total sugar imports down and increased restrictions on imports based on the signed U.S.-Mexico suspension agreements, sugar users are left with uncertainty around how they will meet their business needs when sugar supplies are expected to tighten in the coming months,” said Tom Earley, vice-president, Agralytica. “The already unstable U.S. sugar market has become even more volatile because of the ongoing antidumping and countervailing duty investigations of Mexican sugar imports.”

Bill O’Conner, agriculture policy expert, McLeod, Watkinson & Miller, said, “We continue to be concerned about the suspension agreements, which will put new restraints on imports from Mexico well into the future and likely lead to unnecessarily tight supplies.”