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New sugar export quota from Mexico to the US is 841,795 t

The new sugar export quota from Mexico to the United States amounts to 841,795 tons, in accordance with bilateral regulations.

This Wednesday, the Ministry of Economy published a notice in the Official Gazette of the Federation regarding this export quota.

Under the Agreement between Mexico, the United States and Canada (USMCA), US imports of sugar from Mexico have been duty and quota free since January 1, 2008.

However, following the initiation by the United States of anti-dumping and countervailing duty proceedings in 2014, Mexico’s foreign sugar sales are limited (with the export quota) under a suspension agreement since 2015.

Through the notice, the Ministry of Economy released the amount of the maximum sugar quota as of December 2020, to sell sugar to the United States during the period between October 1, 2020 and September 30, 2021 .

Sugar quota

The United States is the world’s fourth largest consumer and sixth largest producer of sugar, producing both beet and cane sugar.

The USDA Commodity Credit Corporation (CCC) offers limited-enforceability repayment marketing loans to processors of locally grown cane or beet sugar, who, in turn, pay growers at a rate proportional to the value of the loan.

At the end of the loan term (up to nine months), or at any time before, borrowers can sell the sugar on the domestic market and repay the loans in full or, if prices are too low, cede to USDA the sugar given as collateral and thus repay the loans.

However, the second option is rarely used, as US sugar prices are above world market levels since the early 1980s.

The agreements suspended antidumping and countervailing duty investigations of Mexican sugar imports and are reviewed and renewed as determined by the United States Department of Commerce every five years.

Mexico’s export limit is set at 100% of US needs after accounting for US production and imports from countries with tariff quotas (based on commitments in the World Trade Organization).

The Antidumping agreement establishes reference prices for all types of sugar exported by Mexico.

 

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