World sugar prices are in the tank, production efficiency in foreign countries is falling, and the globe’s growing appetite for subsidization is partially to blame. Those were the key messages delivered at last month’s International Sweetener Symposium.
In years past, China’s subsidy of choice was a stockpiling program that helped manipulate domestic prices – not just in sugar but for other crops like cotton, too.
Reforms appear to be forthcoming.
Sugar is the world’s most distorted commodity market and increased government involvement is fueling inefficiency, according to a new video released today by the American Sugar Alliance (ASA).
U.S. sugar producers have filed new subsidy allegations in their countervailing duty case against Mexico’s sugar industry, including evidence that export subsidies are fueling a flood of Mexican sugar shipments and injuring U.S. sugar farmers and processors.
The U.S. Department of Agriculture reported in June an alarming fact about global sugar production. Apparently, most sugar producers outside of the United States are getting less and less efficient.
In its latest acreage report, USDA notes that acres of both sugarbeets and sugarcane are down this year – 1.7% and 3.5% respectively.
Since Mexico began flooding the U.S. market with dumped and subsidized product, U.S. prices have fallen, costing U.S. producers an estimated $1 billion on this crop alone. This depressed business environment is leading to contraction by efficient U.S. producers while inefficient Mexican producers seize more and more market share with the aid of unfair trade.
Her motto has been “Life isn’t a bowl of cherries – it is a bunch of raisins: raisin’ cane, raisin’ kids and raisin’ hope for a better tomorrow.”
India is second only to Brazil when it comes to producing sugar. And following all of the sugar subsidy announcements coming out of the country this year has been akin to watching a yo-yo.
Mexico had agreed to redirect shipments of subsidized sugar to other countries instead of the United States. But it is doing the exact opposite of what it promised. Mexico is actually accelerating exports of subsidized sugar to the U.S. and further injuring U.S. sugar producers.
We wanted to take a moment to thank the 32 members of the Appropriations Committee who stood with America’s sugar farmers. In particular, we wanted to spotlight the four appropriators who made impassioned speeches against Big Candy’s power grab.
“This action was expected and very much in order considering Mexico’s complicated web of sugar subsidies and the fact that Mexico’s government owns a large chunk of the industry,” said Phillip Hayes.
Why are Big Candy lobbyists continuously complaining about sugar farmers and crying poor on Capitol Hill? All the evidence suggests that Candy is King.
The U.S. House Appropriations Committee today reaffirmed lawmakers’ support of the sugar policy included in the 2014 Farm Bill by rejecting an amendment designed to weaken that policy and leave Americans more dependent on subsidized foreign sugar.
In case you’ve forgotten, May marks the 72nd anniversary of sugar rationing in this country. Sugar was the first crop rationed in 1942, and it was the last commodity removed from the rationing list five years later. Back then, America didn’t have a nationwide domestic sugar industry and the Western States relied on shipments from the Philippines and Hawaii. But the Japanese conquered the Philippines and ships in Hawaii normally used to ship sugar were needed for the war effort.
Here are a few attention grabbers about the record amount of subsidized sugar Mexico dumped onto the U.S. market last year.
- Mexico sent an all-time high 2.1 million tons of sugar to America in FY2013. For perspective, that’s enough to supply every person in the U.S. with 13 pounds of sugar.
- This was up from 1.1 million tons the year earlier and marked a doubling of Mexico’s share of the U.S. market from 9% to 18%.
- The resulting price decline—U.S. prices have fallen 50% since the end of 2011—will cost U.S. producers $1 billion this year.
- The USDA was forced to spend $278 million in taxpayer money to keep the market from collapsing under the weight of Mexico’s dumped sugar.
- Mexico’s government, which owns and operates 20% of the Mexican sugar industry, is the country’s biggest producer and exporter of sugar.
The fact that an inefficient industry largely controlled by the government strengthened its foothold in America at the expense of U.S. farmers and U.S. taxpayers is alarming. But apparently, it’s just the beginning.
New USDA data show that Mexico is dumping sugar at an even faster pace this year than last. In fact, the 1.3 million tons that has arrived in the first seven months of FY2014 is 48% higher than over the same period the year prior.
Apparently, Mexico has been dumping more than just sugar on the U.S. market, and has been jeopardizing more than just sugar jobs.
It has been about one week since the U.S. Department of Commerce (DOC) launched a formal investigation into the unfair trading practices of Mexico’s sugar industry, noting strong evidence of significant dumping and actionable subsidies. Yet, a group of lobbyists from the candy, corn refining, and Mexican sugar industries are angling to influence what is…
The U.S. Department of Commerce (DOC) today announced that it would initiate an investigation to determine if the Mexican government has subsidized Mexico’s sugar production and whether that sugar is being dumped into the U.S. market. A group of U.S. sugar producers filed antidumping and countervailing duty petitions against Mexico’s sugar industry on March 28, and they applauded DOC’s decision. “It is clear that the petitions have merit in the eyes of the U.S. government,” said Phillip Hayes, a spokesperson for the American Sugar Alliance. “Considering what’s currently happening in the market, we are hopeful that corrective action will be taken as soon as possible.”
India certainly got the international community’s attention when it recently announced a slew of new sugar subsidies, including a direct export subsidy that is likely against World Trade Organization (WTO) rules.
Brazil was so enraged that it demanded the elimination of India’s new sugar programs at a recent WTO meeting. Then Brazil promptly announced a new government handout of its own.
America’s sugar producers today asked the United States government to take corrective action against Mexico’s sugar industry for dumping subsidized sugar onto the U.S. market and inflicting harm on U.S. growers and taxpayers.
The antidumping and countervailing duty petitions filed with the U.S. International Trade Commission and U.S. Department of Commerce allege that the Mexican industry has shipped sugar to the United States at dumping margins of 45 percent or more and has received substantial subsidies from Mexican federal and state governments.
For years, it’s been difficult for lawmakers to learn about confectioners’ economic success. That’s because candy lobbyists are too busy telling Congress that sugar policy has caused them financial harm. Now Capitol Hill has a place to go for Big Candy’s Big News. The American Sugar Alliance released a new website this week that will keep track of…
Earlier this year, Congress overwhelmingly agreed to extend U.S. sugar policy for another five years. Strong support for sugar policy by leaders in the agricultural community certainly helped make that decision easier for lawmakers.
And don’t look for that support to wane anytime soon. Just last week, the National Farmers Union held its annual conference and adopted its policy positions for the upcoming year. When it comes to sugar policy, NFU reaffirmed its support:
A February article by Bloomberg noted that the glut of unneeded sugar holding down prices isn’t likely to subside anytime soon. As the news service put it:
The global sugar surplus will extend to a fifth year as government support and weakening currencies in producing countries partly make up for lower prices.
This week, the National Confectioners Association (NCA) is hosting its annual State of the Industry Conference at the Fontainebleau Resort in Miami Based on the news pushed out by NCA recently, conference attendees will likely hear that the state of the candy industry is strong. Ironically, they’ll also probably hear from industry lobbyists that sugar…
With a strong five-year sugar policy at their side, U.S. sugar producers are now setting their sights on addressing the foreign sugar subsidies that make U.S. sugar policy necessary. That’s according to Jack Roney, director of economics and policy analysis for the American Sugar Alliance (ASA), who spoke today at the USDA Agricultural Outlook Forum. “U.S. sugar producers are among the most efficient in the world, and we would thrive in a global free market, if one existed,” he explained. “But historically, sugar has been and continues to be the world’s most distorted commodity market because of foreign subsidization. Something must be done about it.”
This Friday is Valentine’s Day, and chances are good that Big Candy lobbyists will use the holiday as an excuse to bash U.S. sugar policy on Capitol Hill. They will claim that current sugar policy has harmed them financially, which is why Congress should outsource domestic production to heavily subsidized foreign producers. But these same…
President Barack Obama today officially signed the 2014 Farm Bill, and with it, continued America’s current sugar policy for another five years. Sugar producers applauded the new law, which overcame tremendous obstacles to ultimately unite leaders from both political parties.
The sugar industry also noted its appreciation for the signing ceremony being held in Michigan, which is home to Senate Agriculture Committee Chairwoman Debbie Stabenow (D)…
In the world of cotton, China is well known for its massive government-run stockpiling program. This program, one aim of which is to keep prices inflated for Chinese growers, has led to uncertainty in the world market, and is compounded by other subsidies to its cotton farmers. Seems China’s sugar sector is pursuing similar policies.…
The curtain has officially closed on 2013, and by any definition, it was a sensational year for America’s candy makers. Sales were up. Profits were high. And companies announced numerous expansion projects. Now based on new data by Yahoo!Finance, we realize just how profitable things have been. Confectioners check in at an amazing 12.3% profit…
The American Farm Bureau Federation, the nation’s largest agricultural trade group, is holding its annual convention this week where members will discuss policy priorities. The Farm Bureau has been a strong supporter of U.S. sugar policy over the years and was instrumental in beating back recent policy attacks by big candy companies that sought to…
U.S. sugar producers have publicly backed a “zero-for-zero” sugar policy, which would promote an end to global sugar subsidies in favor of a free market. Meanwhile, foreign sugar producers have been busy ratcheting up their subsidies and artificially manipulating global prices. The latest example comes from India, the world’s second biggest sugar producer and third…