Sugar exports from Mexico to the US get the green light
Sugar exports from Mexico to the United States obtained the last step to maintain the suspension agreement for the next five years.
On December 19, 2014, the United States Department of Commerce signed an agreement with the Government of Mexico that suspends the countervailing duty investigation of imports of this sweetener from Mexico.
The Commerce Department signed a second and third agreements with Mexican sugar producers and exporters in 2017 and 2020, suspending an investigation of anti-dumping duties on imports of Mexican sugar.
The agreements suspending the investigations alter the nature of trade in this product between Mexico and the United States by imposing volume limits on US imports of sugar from Mexico and establishing minimum price levels.
Sugar exports
The United States Department of Commerce published on April 30 in the Federal Register its notice by which it notifies its intention to maintain the validity, for five more years, of the Suspension Agreements that guarantee the export of Mexican sugar to the United States market since December 2014.
«The DOC announcement is a good sign for Mexican sugar exports, given that it provides certainty and maintains access to the United States market under preferential conditions,» said the Ministry of Economy in a statement.
In this sugar cycle, Mexico will be able to export to that country a maximum of up to 1 million 421,901 metric tons, which is the highest since the entry into force of the Suspension Agreements in 2014.
“Maintaining access to the US market, through the Suspension Agreements, will benefit cane producers and their families, as well as mills located in 15 States of the Republic, with a positive impact in 267 municipalities where approximately 15 million Mexicans live ”, added the Ministry of Economy.
Mexican sugar
From 2008 to December 2014, Mexico’s sugar exports were granted unrestricted volume and tariff-free access to the United States market, under the North American Free Trade Agreement (NAFTA).
But two suspension agreements that the United States government signed with the government and Mexican sugar producers and exporters in December 2014 led to limitations on the trade in this sweetener.
Since then, the amount of the total quota for each sugar cycle is determined based on a formula that includes two variables: the excess supply of Mexico and the needs of the United States.
Mexican sugar is also subject to the minimum reference prices of $ 0.26 per pound of refined and $ 0.2225 for the rest.
In addition to the quantitative export limits and minimum prices established under the suspension agreements, Mexico agreed to limit refined sugar exports to no more than 53% of the total volume of its exports to the United States market in each year, that is, at least 47% of its sugar exports would be raw sugar.
