TRAVERSE CITY, MICH. — Sugar industry representatives from the United States and Mexico speaking Aug. 7 at the International Sweetener Symposium in Traverse City both extolled the success of a sugar trade agreement signed about a year ago.
Although there have been challenges, there are “no serious issues with the suspension agreements,” said Humberto Jasso, executive president of the Mexican Sugar Chamber, which represents Mexico’s sugar industry.
“The first year of the suspension agreements — it has been positive,” Mr. Jasso said. “There have been challenges, but we overcame the bulk of them.”
Mr. Jasso said hurdles included production of sugar below 99.2 polarity (basically raw sugar) by Mexico’s industry that was designed to produce mostly refined sugar, licensing of exports, distribution of export licenses among Mexico’s sugar mills, timing of export shipments required by the suspension agreements and others.
Mexico and the United States agreed to revised suspension agreements in June 2017 that became effective Oct. 1.
Those agreements “suspended” anti-dumping and countervailing duties that were imposed by the United States after it was determined Mexico was selling sugar into the United States at prices below prices in Mexico (dumping) and was subsidizing its domestic industry, both to the harm of the U.S. sugar industry. The export limits imposed by the agreements replaced duty free trade of sweeteners (sugar and corn sweeteners) between the United States and Mexico under the North American Free Trade Agreement. They also changed the mix of Mexican sugar exported to the United States, requiring 70% be 99.2 polarity or below (raw cane) and 30% be refined from 53% and 47% previously, and adjusted minimum or reference prices for export sugar, among other requirements.
He said it was important that Mexico know the export limit set by the United States during Mexico’s cane harvest so mills can adjust production of 99.2 polarity and refined sugar accordingly.
Mr. Jasso said that if there was no NAFTA, there would be no sugar exports to the United States because of tariffs and no HFCS imports by Mexico, which have basically replaced the sugar exported to the United States.
Mike Gorrell, president and chief executive officer of Imperial Sugar Co., agreed the suspension agreements were working. Imperial depends almost entirely on raw cane imports, much of which come from Mexico.
“U.S.-Mexico sweetener markets have finally found a reasonable balance,” Mr. Gorrell said. The balance came after 10 years of “traumatic trade” between the two countries during which both markets ran out of sugar twice, he said.
Frank Jenkins, president of JSG Commodities, Wilton, N.J., agreed that Mexico was on track to meet all of its export commitments to the United States under the revised Suspension Agreements in a presentation at the symposium on Aug. 6.
“Mexico has performed pretty flawlessly,” Mr. Jenkins said.