The Commerce Department announced it will open an investigation into charges that Mexico is dumping subsidized sugar in the United States. American sugar growers filed a petition on March 28, saying countervailing duties are necessary due to unfair competition. The next step is for the International Trade Commission, a U.S. agency, to make a preliminary determination if there has been harm to U.S. producers, says the Capital Press.
Sugar from Mexico is guaranteed duty-free entry to the United States under the North American Free Trade Agreement. U.S. growers forfeited 382,000 tons of sugar at a cost of $280 mln to the government in fiscal 2013 due to low prices. The forfeitures amounted to 4 pct of the 2013 crop. U.S. growers blamed large imports from Mexico for low U.S. sugar prices. To get rid of the forfeited sugar, USDA sold it at a loss to ethanol makers and livestock feed companies.
USDA projects smaller imports from Mexico this fiscal year and sees a smaller U.S. sugar surplus than in the preceding year – 13 pct vs 17.9 pct. A 15 pct stocks-to-use ratio is considered sufficient to ensure adequate supplies and prices high enough to avoid forfeitures. The farm law guarantees growers will get at least 20.9 cents per lb.