Brief

As US and Mexico battle over sugar, will manufacturers look to new substitutes?

Dive Brief:

  • Mexico, the U.S. and U.S.'s Imperial Sugar disagree on the effectiveness of 2-year-old anti-dumping rules affecting bulk imports of Mexican cane sugar, according to Food Business News.

  • The company claims that while bulk imports have dropped, consumer packs of sugar have shot up, putting U.S. refiners at risk.

  • The U.S. Secretary of Commerce disputes several of Imperial's claims and contends that so-called Suspension Agreements are working as intended.

Dive Insight:

There's nothing sweet about Imperial Sugar's complaints against Mexican cane sugar producers. In a letter dated December 5 to Commerce Secretary Penny Pritzker, the company claimed the Countervailing Duty and Anti-dumping Suspension Agreements between the U.S. and Mexico violate fair trade laws and threaten the U.S. sugar refining market. But on December 8, the Mexican Chamber of Sugar Producers sent its own letter to Pritzker that criticized Imperial's claims and declared that the agreements, in effect since December 2014, are working fine.

The agreement was established after an October 2014 finding by the Commerce Department that Mexican sugar exporters were dumping sugar on the U.S. market at prices that undercut domestic producers. This hardly marked the first time the two countries disagreed on sugar-related issues — they've been doing that for years.

What is different now is Imperial's claim that Mexican producers are maintaining their export levels by refining and packing the sugar themselves, instead of exporting it raw and leaving refining up to American companies. But it provided no evidence that this is happening, arguing instead that the change in sugar form before it enters this country puts American refiners at risk — as well as the quantity of bulk sugar needed by U.S. product producers.

The Department of Commerce has said it is “working in good faith” with the Mexican government and the sugar producers' Chamber on revisions to the trade pact. But the dispute over such an important commodity needs to be resolved quickly, lest the uncertainty opens the door to more manufacturers shifting their formulations to use less sugar and more of the up-and-coming new sweetener substitutes.

Filed Under: Ingredients Policy
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