The governments of the United States and Mexico drafted an historic sugar trade agreement Oct. 27 in an effort to avoid potential U.S. import duties of more than 50% and the possibility of an escalating trade war. If ratified, it likely will be the biggest news in the sugar market since Jan. 1, 2008, when the North American Free Trade Agreement opened the door to unrestricted trade of sweeteners between the two countries.
But this time the intent is to control sugar exports from Mexico that in the past couple of years have been record high, contributing to lower U.S. sugar prices and loan forfeitures in 2013. If successful, the result also may be reining in sugar cane production in Mexico that has been increasing since 2008, in part because Mexico basically saw the United States as an “easy” market to sell surplus sugar. (more)