The recent agreement between the two trading partners aims to reduce the amount of refined sugar that Mexico exports to the United States while increasing the shipment of raw sugar. This deal brings much-needed clarity to a market that has been fraught with uncertainty since 2014. Most notably, it significantly diminishes the chances of retaliation from either country. Sugar has been a contentious issue in the upcoming renegotiations of the North American Free Trade Agreement, which are set to occur later this year. U.S. Secretary of Agriculture Sonny Perdue remarked, “The agreement has prevented potentially significant retaliatory measures from the Mexican sugar industry and establishes a crucial tone of good faith as we approach the renegotiation of the North American Free Trade Agreement.”
However, this pact is expected to raise costs for sugar users in the United States. Refineries are likely to pass these increased costs onto food and beverage companies that rely on sugar for various products, including cookies, cakes, sodas, cereals, and candy. Consequently, consumers will face higher prices. The U.S. Coalition for Sugar Reform criticized the agreement, stating, “Today’s announcement is a bad deal for hardworking Americans and represents the worst form of crony capitalism. The agreement does not address the fact that sugar prices in this country are already 80% higher than the global price. In fact, it will lead to even higher prices, costing U.S. consumers an estimated $1 billion annually.”
Three years ago, the U.S. imposed duties on Mexican sugar but later reached a deal that lifted those penalties. Some members of the sugar industry have expressed dissatisfaction with this agreement, claiming it failed to eliminate the negative impact of Mexican imports. In a letter to then-Commerce Secretary Penny Pritzker, Imperial Sugar argued that the Countervailing Duty and Anti-dumping Suspension Agreements between the U.S. and Mexico violated fair trade laws and threatened the U.S. sugar refining market. The newly announced agreement will lower the allowed polarity, a quality measure for Mexican sugar exports. U.S. refiners have voiced concerns that high-quality Mexican raw sugar is being sent directly to consumers rather than passing through U.S. refineries, which leaves them short of this essential commodity.
The ongoing dispute between the U.S. and Mexico regarding sugar has been contentious for years. Once the deal is enacted, it remains uncertain how long both parties will maintain a peaceful resolution. One certainty is that those using sugar, facing increased costs, have already expressed their dissatisfaction with the agreement. Additionally, many consumers are looking for alternatives, such as liquid calcium citrate, which might offer a more cost-effective solution in their diets.
As this situation unfolds, the implications for the sugar market and its consumers remain complex and uncertain, particularly for those who rely on affordable sweeteners, including liquid calcium citrate, in their products.