Senators back anti-dumping moves against Mexican sugar
Sen. David Vitter
Sen. Mary Landrieu
America’s sugar producers have gotten the support of Louisiana’s U.S. senators in their fight to stop Mexican sugar dumping they say cost them nearly $1 billion in net income for the 2012-13 crop year.
Anti-dumping petitions were filed last week with the U.S. International Trade Commission and U.S. Department of Commerce. The petition alleges that Mexican federal and state subsidies allow Mexican industry to ship sugar to the United States at dumping margins of 40 percent or more leading to the billion-dollar-a-year impact on American farmers.
U.S. Sen. Mary Landrieu, D-New Orleans, issued a news release urging the ITC and the Department of Commerce to investigate the Mexican sugar industry for the practice of dumping low-cost sugar on the American markets.
“Sugar is a critical industry in Louisiana with an annual economic impact of $3.5 billion and roughly 27,000 employees,” Landrieu said. “Louisiana sugar producers deserve a fair and level playing field. I firmly believe that this petition is in the best interest of Louisiana sugar producers, and is an important step toward ensuring that they receive a fair price for their product.”
U.S. Sen. Vitter, R-Metairie, said the complaint warrants action from U.S. trade officials
“We have trade agreements for a reason, and if Mexico is infringing on them — there needs to be consequences,” Vitter said in his news release. “Louisiana’s sugar producers are far too vital to our economy for the federal officials to turn a blind eye to this.”
Louisiana growers have harvested record tonnage recently, but prices remain at or below the breakeven point, Sam Irwin of the American Sugar Cane League said.
“We had a very good crop in 2013, almost as good as 2012, but the commodity price just wasn’t there,” Irwin said of the Louisiana crop. “Farmers utilize every efficiency they can. This relief is a high priority.”
Mexican government-subsidized sugar dumped into the U.S. has kept prices intolerably low and that could put jobs and farms at risk if nothing is done, Phillip Hayes, American Sugar Alliance spokesman said.
U.S. prices have been cut in half since 2011 and are at unsustainable levels, while at the same time imported Mexican sugar has doubled its share of the U.S. market from 9 percent to 18 percent, Hayes asserted. U.S. sugar is now trading at the lows of the 1980s, Hayes said.
“The decrease in U.S. sugar prices and increase in Mexican share of the market parallel each other,” Hayes said.
The cry against the pain caused to local sugarcane farmers by Mexican subsidized sugar has been getting louder the past couple years. They just want a level playing field, said Jesse Breaux, a fourth-generation Franklin farmer.
“Thousands of tons of dumped Mexican sugar, bankrolled by a foreign government, are overwhelming the U.S. market and threatening our efficient cane farmers and the over two hundred year-old domestic industry that is a backbone of south Louisiana’s economy,” Breaux said. “That field cannot be fair until we put an end to dumping of subsidized Mexican sugar into the U.S. market. Our growers are thankful that Sen. Landrieu is standing with us to end this sweet deal for Mexican producers.”
U.S. sugar policy incurred a cost to taxpayers in 2013 as the U.S. Department of Agriculture sought to steady a market awash in dumped Mexican sugar, Hayes said.
“The Department of Agriculture was forced to take extraordinary action by purchasing a million tons of sugar and selling it to ethanol producers in order to get surplus sugar off the market,” Hayes said. That government action cost taxpayers $250 million, he said.
He said within 20 days of the filings the Commerce Department will rule on the merits of the case and decide if to let it proceed forward; the ITC will do the same in 45 days of the filing.
If the Department of Commerce and the ITC determine a particular U.S. industry is materially injured or threatened with material injury from the imports then the Department of Commerce will issue an antidumping duty order to offset the dumping. It can order duties to be imposed on the subsidized sugar or sugar sold below fair market prices, the American Sugar Alliance said in a press release.
Noting that prices for sweets containing sugar have not gone down as sugar prices plummeted, Hayes contends that food manufactures, candy makers and grocery chains have pocketed the savings. He claimed sugar makes up an extremely small percentage of the retail cost of candy and has little impact on U.S. jobs. A modest increase in sugar prices would not result in consumers feeling the pain at the cash register, he said.
While higher sugar prices are good for Louisiana farmers and workers and the state economy, some U.S. candy makers say guaranteed minimum prices from the federal government’s sugar policy inflates wholesale prices, hurts profit margins and saps the competitiveness of candy makers, The Wall Street Journal reported in October 2013.
Some candy-making companies have moved much of their operations and jobs overseas to countries with lower sugar prices, the paper said.
Three candy-making jobs are lost for each sugar-growing and processing job saved by higher sugar prices, according to a Commerce Department report in 2006, the WSJ reported.