TWIN FALLS—Idaho sugarbeet growers hope a deal announced last month will stem the flow of sugar north from Mexico.
In late October, the U.S. Department of Commerce announced a preliminary anti-dumping determination with duty deposits of up to 47.26 percent. That announcement was quickly followed by an agreement by U.S. and Mexican officials to suspend the anti-dumping and countervailing duty investigations of sugar from Mexico. If that agreement is signed, any duties imposed by the Commerce Department would be suspended.
The proposed deal includes provisions to prevent imports form being concentrated during certain times of the year, limits the amount of refined sugar that can enter the U.S. and establishes minimum price mechanisms to guard against undercutting U.S. producers.
Mexican producers also agreed to sell at a minimum of $0.2357 per pound for refined and $0.2075 for raw sugar.
“Like our counterparts in Mexico, we want NAFTA to operate as intended and to foster free and fair trade in sugar between the countries,” said Phillip Hayes, spokesman for the American Sugar Alliance. He said he thinks the agreement will benefit both U.S. and Mexican growers by stabilizing prices at a higher level.
But mill owners in Mexico say they are struggling to breakeven after four years of surplus production and need unrestricted access to their biggest customer.
U.S. sugar producers filed a lawsuit in late March asking the U.S. government to take action against Mexico for dumping surplus sugar at below their cost of production or lower than the price charged for sugar in Mexico. Although there have been over 100 lawsuits filed under the North American Free Trade Agreement (NAFTA), this was the first one involving sugar.
While NAFTA gives Mexico the right to export sugar to the U.S. on a tariff-free and quota-free basis, but the 20-year-old trade agreement does not give Mexico the right to export surplus to the U.S. market at dumped prices, Hayes said.
Sugar from Mexico accounted for 18 percent of the U.S. market in the 2012-2013 marketing year, up from 9 percent in 2011-2012. Imports of sugar from Mexico was estimated at $1.1 billion in 2013.
U.S. prices have fallen by about half since 2011. The Midwest wholesale refined beet sugar was 36.6 cents per pound in October, compared to 59 cents in October 2010.
Prices have gained about 10 cents a pound since the lawsuit was filed. Imports from Mexico are also down by about a third.
In their lawsuit, U.S. growers claimed dumped sugar from Mexico would cost them $1 billion on the 2013 crop alone. USDA spent an additional $278 million to prop up the price of sugar.
One consequence of lower prices has been fewer sugarbeet acres. Sugarbeet acres in the U.S. were down 1.7 percent this spring while sugar cane acres fell by 3.5 percent. Idaho sugarbeet acres were down 3 percent to 171,000 acres. Oregon acres were down by a third to 6,700 acres, all of which are processed in Idaho.
Hayes said 2014 was the fourth year in a row that U.S. sugarbeet acreage had fallen.
The Commerce Department investigation found that sugar from Mexico has been sold in the U.S. at dumping margins ranging from 39.54 to 47.26 percent. Commerce had recommended anti-subsidy duties on Mexican sugar of up to 17.01 percent.
The proposed deal may be finalized before Thanksgiving.
Source: www.magicvalley.com