From The Sweetener Symposium:
NAPA, Calif.—When both chambers of the United States Congress voted this summer to continue U.S. sugar policy, it was a big victory for the 142,000 jobs supported by the sugar industry, according to University of Maryland Professor Alexander Triantis.
“A weakened sugar policy would have a profound effect on sugar related jobs,” he said today at the 30th International Sweetener Symposium. “But I’ve found no evidence that sugar price affects jobs in the sugar-using industry.”
Triantis, who is the former chair of the university’s finance department, pointed to job growth in the sugar-containing product (SCP) manufacturing sector since 2006. Employment by food manufacturers who don’t use sugar, on the other hand, fell by 3 percent.
“The SCP industry is faring very well under current U.S. sugar policy,” he told the group.
“SCP companies have experienced strong revenue growth over time. These companies have high profitability and high returns on equity, even when sugar prices increase,” continued Triantis. “Coupled together with low risk and therefore a low cost of capital, SCP companies have generated impressive total shareholder return since 2000, and their stocks are priced to reflect strong expectations for the future.”
Triantis also debunked a common myth about sugar prices and consumers. “There is absolutely no evidence that lower sugar prices are passed on to consumers as lower retail SCP prices,” he said. U.S. sugar prices are down more than 50 percent in two years, yet SCP product prices have risen over that period.
Opponents of U.S. sugar policy often claim that consumers would benefit if the U.S. market were flooded with cheap, subsidized foreign sugar. The American Sugar Alliance (ASA) contends that the best outcome for consumers is one of price stability and reliable production. It says that the heavily subsidized global sugar market is prone to extreme price volatility and supply variations.
For more information about the International Sweetener Symposium, visit www.sugaralliance.org
Symposium audio files can be downloaded at www.ASAradio.org