By Adriana Barrera
MEXICO CITY, June 2 (Reuters) – Mexico’s sugar industry is pushing for the United States to eliminate limits on U.S. imports and is working on a potential anti-dumping case against U.S. fructose should talks on the issue fail, industry representatives said on Tuesday.
Mexico produces cane sugar across half its states and its producers, mill operators and day laborers are politically influential.
National Agricultural Council (CNA) representative Juan Cortina told reporters the U.S. had in recent years applied a measure called “future imports subject to tariffs” that drastically reduced the quota of sugar imports allowed from Mexico.
Sugar was subject to the North American Free Trade Agreement until 2014, when the U.S. became Mexico’s main sugar market, but dumping accusations in the U.S. led to strict import caps and minimum prices.
“In recent years, we have gone from an average quota of 1 million tons to just about 180,000 metric tons this year,” Cortina said.
EXPORT DECLINE ERODES PRICES
The drop in exports has caused a significant drop in domestic prices. Surplus sugar is also being sold to other foreign buyers at prices below what they would have fetched in the U.S., according to industry representatives.
Adding the “future imports” category immediately took away Mexico’s market share, even as the U.S. continued to import sugar while paying tariffs on it, Cortina said.
Last year, Mexico implemented a new tariff structure for its own sugar imports, responding to pressure from local producers as unusual foreign purchases led to falling prices.
It imposes a 156% tariff ad valorem per kilogram of sugars and syrups, and 210.44% per kilogram of refined liquid sugar.
Cortina said Mexico is seeking a common market with the U.S. with entry barriers and common rules, so sugar is not imported into the U.S. from third countries that would count against Mexico’s quota.
Referring to a longstanding dispute over U.S. fructose, which enters Mexico tariff-free, Cortina said the sector was hoping to reach an agreement.
“If that doesn’t work, the Mexican sugar industry is working on an anti-dumping case against fructose, because there is indeed an imbalance in sweeteners that goes against what had been agreed upon with the United States,” he said.
CNA is set to attend talks in Washington next week as the countries review their USMCA free trade pact with Canada.
CNA President Jorge Esteve said the sector is looking to diversify its markets so it is not so “subject to these uncertainties that arise at some point because someone wants to take advantage.”
(Reporting by Adriana Barrera; Additionla reporting by Sarah Morland; Editing by Rod Nickel)
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