“For much of the past decade, African and foreign sugar companies have pumped billions of dollars into projects in an attempt to tap the sweet tooth of the continent’s new middle class. Today, mills in many countries are grappling with unsustainable stockpiles. The glut has forced companies to reduce output, put on hold new sugar projects and shutter mills.
“The culprit: cheap imports. African nations import about 5 million metric tons of sugar every year, from countries such as Brazil, China and India. The imports—generally heavily subsidized—are sold at prices lower than the cost of producing sugar locally, prompting African countries to shun sugar from their neighbors.”
Unfortunately for Africa, things on the sugar front will probably get even worse.
Brazil has announced new bailouts this year and looks determined to maintain its OPEC-like stranglehold on the world sugar market. China is transitioning from a sugar-stockpiling program to direct subsidy checks meant to boost production. Thailand’s new government has already pledged to help incentivize the production of 1 million more tons of sugar. And keeping up with India’s market manipulation this year has been a full-time job.
Collectively, those four countries control nearly 65% of global exports, and their predatory trade practices is the primary reason the United States and other countries have sugar policies in place to defend domestic industries.
The time has come to end all sugar subsidies, in all countries, at one time, once and for all, so a real free market can take shape. Consumers from Africa to America would all be better off.
The zero-for-zero sugar policy would be a good place to start.