It’s rare that a general business reporter with a national publication writes about the intricacies of the domestic sugar market. It’s even rarer that the resulting report is 100% spot on.
That happened this week at the Huffington Post. And instead of adding any of our own commentary, we’ll just repost their write up.
Sugar prices have been falling for years, and are currently as low as they were in the 1980s. As of January 2016, U.S. producers receive 25.76 cents per pound for unrefined sugar. From 2010 to 2013, U.S. raw sugar prices fell 50 percent due to the influx of sugar imports from Mexico flooding the marketplace. This led to a surplus ratio of 20 percent.
Should Cuban sugar enter the U.S. marketplace, this will hurt the U.S. sugar producers who will be forced to compete with additional cheaper sugar imports. Although U.S. sugar producers would experience declining profits if the trend continues, U.S. consumers likely won’t feel the benefit of the lower sugar prices, as grocers and food manufacturers rarely pass along their price savings.
A history of low, stagnant sugar prices in the United States. Domestic economic pain resulting from subsidized foreign imports. No passthrough of low sugar prices to grocery shoppers as Big Candy pockets extra profits. We couldn’t have said it any better ourselves.