Lawmakers Worry About Sugar Prices and Renegotiate NAFTA Now


**A growing concern among U.S. lawmakers and food manufacturers that they’ll see the price of sugar go up if the sugar refining industry gets what it’s demanding from Mexico.

A group of 51 House members has signed onto a letter to Commerce Secretary Wilbur Ross not to go through with some proposals like raising the floor price for raw and refined sugar and funneling some raw sugar imports directly to specific refiners.

**Farm groups and farm-state lawmakers are increasingly looking at the renegotiation of NAFTA as if you were removing a bandage. If it has to be done, and the Trump administration has made clear it does, then it’s far better to get it done quickly.

Mexico, which spends about $19 billion per year to buy U.S. corn, soybeans, beef, pork, rice, milk and other commodities, is increasingly jittery about the viability of U.S. exports.

House Ag Chairman Mike Conaway says the sooner the countries can close the book on a new NAFTA, the better.

**The FDA has a tough job ahead, a job the food and agriculture sectors have struggled to accomplish: Convincing the public that biotech crops are safe.

The 2017 spending bill includes $3 million earmarked for FDA on a consumer outreach and education effort. The stated goal is to educate consumers “on the environmental, nutritional, food safety, economic, and humanitarian impacts of such biotech foods.”

The provision surfaced last year as Congress debated legislation to block state GMO labeling laws.

Sugar prices drop amid rising beverage cost

Sugar prices drop amid rising beverage cost By Chino S. Leyco While consumer groups and micro-enterprises warn that the proposed excise tax on sugar-sweetened beverages would raise the price of some sugary products, government data showed that …

Big Sugar makes sour impact on Everglades


Some Americans are aware that the federal sugar program makes their food cost more. But few know this same program is causing environmental wreckage in Florida that their tax dollars will have to pay for.

The sugar program, known to its many critics as the “sugar racket,” is a tangle of price supports, which increase the cost of sugar in the United States, and tariffs and quotas on imported sugar, which keeps cheaper sugar from reaching our market.

“There’s probably no better example in U.S. history of a case of both legal plunder and crony capitalism that has been tolerated for so many years, and that has picked more money from the pockets of Americans” than the sugar program, says American Enterprise Institute economist Mark J. Perry, who has shown that “American consumers and domestic sugar-using industries have been forced to pay twice the world price of sugar for many generations.”

But it’s a great deal for the three Florida companies that produce nearly half of the country’s sugar supply: U.S. Sugar, the Sugar Cane Growers Cooperative of Florida and the Fanjul Corp., which has helped fund Republican U.S. Sen. Marco Rubio’s political career, obliging him to support government subsidies he should philosophically oppose.

Beyond the economic harm done by the sugar program is the environmental damage to Everglades National Park, a 1.5 million acre wetlands preserve near Florida’s southern edge. According to the National Park Service, the Everglades are a “World Heritage Site, a Biosphere Reserve and a Wetland of International Significance.” It is also the “largest subtropical wilderness in the United States,” the “predominant water recharge area for all of South Florida,” and home, as well, to almost 750 species of mammals, birds, reptiles and fish. In short, it’s a natural treasure.

As it turns out, federal policy has provided Big Sugar with a strong financial incentive to foul this wilderness.

“Federal farm policies damage the natural environment in numerous ways,” Cato Institute scholar Chris Edwards wrote last fall in “Downsizing the Federal Government.”

“Subsidies are also thought to induce the excessive use of fertilizers and pesticides, which can cause water contamination problems. Sugar cane production has expanded in Florida because of the federal sugar program … and the phosphorous in fertilizers used by growers causes damage to the Everglades.”

An effort to protect this sensitive region was initiated in 2000 through the Water Resource Development Act, which authorized the Comprehensive Everglades Restoration Plan. Part of the restoration included construction of a reservoir that would hold Lake Okeechobee runoff.

The objective was to stop the flow of those harmful agricultural nutrients into the Everglades, Florida’s rivers and eventually its beaches.

But critics say that the sugar industry has been a less-than-cooperative partner in the restoration effort.

“Since the 1990s,” The New Tropic reported last summer, “Big Sugar has been able to fend off state water clean-up requirements and routinely leave us, the taxpayers, to pick up the bill for Everglades restoration efforts.”

Big Sugar is certainly big, but its lobbying influence exceeds its weight class, as its successful obstruction of the Everglades plan shows.

Maybe this is because the “OPEC of sugar” funds its strong-arm lobbying efforts with the hefty profits it generates with the assistance of government policy. And with the price of sugar in the United States often twice as high as the global price, those profits are abundant — causing American consumers to pay an extra $1.4 billion for sugar in fiscal 2013, according to research from Heritage Foundation policy analyst Bryan Riley.

It would be well-deserved justice if Big Sugar was made to pay a substantial part of the Everglades’ restoration costs. Why not? The reservoir alone, which moved a small step closer to reality this spring when state lawmakers approved a measure to secure at least some of the needed land, will cost an estimated $1.5 billion to $2.4 billion.

Not often do free-market advocates and environmental activists become allies. But they can find common ground on this issue.

A strong coalition advancing from both sides would be a potent political force for ending the sugar racket.

Subsidized sugar likely for AAY card holders


A fallout of the implementation of the National Food Security Act (NFSA) in the State, sugar will no longer be part of the subsidised food items supplied through the public distribution system (PDS) in the State. The impact may soon be felt in the open market, where the price of sugar is likely to skyrocket. The current price of sugar in the open market is around ₹45.

Moreover, there were reports of the Food and Agriculture Organization (FAO) forecasting a further increase in the global prices of sugar.

With the Centre taking away the sugar subsidy following the NFSA legislation, there has been no supply of sugar to the State since April.

Six States, including Kerala, had been receiving sugar from the Centre at a subsidised rate till March

Till now, the States had been purchasing sugar to be supplied through the PDS, from the open market at wholesale rates, to be sold through ration shops at a subsidised rate of ₹13.50 a kg to BPL families [The BPL category is now divided into Priority card holders and Antyodaya Anna Yojana (AAY) card holders or the poorest of the poor].

The Centre used to give a subsidy of ₹18.50 per kg to States. But with the allocation on sugar subsidy curtailed from the earlier ₹4,500 crore to just ₹200 crore in the Union Budget 2017-18, the Centre had sounded out the States early itself that it will not be supplying sugar any more to be sold through ration shops.

The BPL category is not defined under the NFSA, while it talks about the AAY, Priority and Non-priority categories.

The subsidy had to be scrapped as the classification of Priority category was almost double that of the earlier BPL category, entailing a financial burden that the Centre could no longer support.

“We have not received any sugar since April. We had been holding the stock we received in March, which is now being supplied to both Priority and AAY card holders as per the existing guidelines. In future, however, the State will have to decide if it can bear the huge burden of buying sugar and selling it at a subsidised rate to 34 lakh families in Kerala,” says Babychen Mukkadan, all-India general secretary of the Retail Ration Dealers’ Association .

“We have now received a communication from the Centre that the sugar subsidy will be continued and limited to just the AAY category, which will receive one kg sugar per family,” Special Secretary, Civil Supplies, Mini Antony said.

Kerala has about 5.95 lakh AAY families. Approximately 29 lakh families in the Priority category who used to receive subsidised sugar through ration shops will now have to buy from the open market.

Govt breaks up exploitative prices


There’s a recurring phenomenon each year when the Ramadhan fasting month comes around: staple food prices pick up.

As people are familiar with the situation, they seem to take it for granted, assuming that a peak in demand will naturally increase prices.

However, this seemingly “general truth” does not apply to Trade Minister Enggartiasto Lukita, who believes the pattern is neither correct nor normal and speculators play a big role in pushing up prices.

Determined to change this, in early April the minister called on big producers and distributors of staple foods such as sugar, cooking oil and meat, to set reasonable price level for themselves as well as their consumers.

“I locked them in the auditorium [of the Trade Ministry] for three days and nights. We did this until we agreed on the set prices,” Enggartiasto recently told reporters.

Since then, the price of sugar and cooking oil has settled at Rp 12,500 (94 US cents) per kilogram and Rp 11,000 per kg, respectively, while frozen beef and Indian buffalo are sold for up to Rp 85,000 per kg and Rp 80,000 per kg, respectively.

The mutually agreed to price ceilings came into effect on April 10.

The move is designed to anticipate the fasting month in late May and the Idul Fitri festivities in late June as people in Indonesia, the world’s most populous Muslimmajority country, eat much more than usual to break their fast or cook special dishes during family gatherings.

The Trade Ministry has also joined forces with a food stability task force set up by the National Police along with related stakeholders, including the Agriculture Ministry, the Business Competition Supervisory Commission (KPPU) and state-owned logistics firm Bulog, to closely monitor food prices and avert food hoarding practices nationwide.

The effort seems to be generating the desired goal. At the beginning of Ramadhan, prices of staple foods climbed modestly, reversing trends seen in previous years.

Data from shows that on Friday, the price of bulk cooking oil rose by only 2.5 percent to Rp 12,300 per kilogram, while the price of fresh meat was up 2.86 percent to Rp 32,350 per kg and the price of eggs was up by 4.23 percent to Rp 22,200 per kg. Garlic prices, meanwhile, slipped by 0.86 percent to Rp 51,600 per kg.

The price of frozen beef, for example, is now lower than last year when the price rose beyond Rp 120,000 per kg.

Up to Wednesday, Bulog claimed it had secured 33,000 tons of buffalo meat and 360,000 tons of sugar to distribute across the country.

Enggartiasto admitted that the still high price of garlic remained a concern and that this had been addressed through recent imports.

“I don’t say that relatively stable prices means that we’re 100 percent successful, but at least we’re seeing low inflation,” he said Wednesday.

Alleged hoarding practices by importers are said to be a cause of persistent high prices. The police are investigating these alleged practices in Jakarta, Medan and Surabaya.

In a separate development, the Central Statistics Agency (BPS) reported on Friday that monthly inflation stood at 0.39 percent month-on-month (mom), bringing the annual inflation rate to 4.33 percent year-on-year (yoy).

The inflation was primarily triggered by hikes in the prices of food commodities such as garlic, chicken eggs, chicken meat, rice and beef alongside other costs such as electricity, fuel, airline fares and cigarettes.

Coordinating Economic Minister Darmin Nasution acknowledged that May’s inflation was quite high and attributed this situation to volatile food components. He added that the government had found irregularities in the distribution of some food commodities, including garlic, with importers contributing to market distortions.

“Let the trade minister deal with them,” he said Friday.

Despite May’s inflation, Darmin said this year’s maximum inflation target, set at 5 percent, was still achievable by the end of 2017.

Bank Central Asia’s (BCA) chief economist David Sumual said imports of food commodities could help maintain a good supply and tame prices in the short- and medium term. However, in the long term, improved production will be the ultimate solution, he said.

“We should improve longterm food productivity because in terms of quantity, our domestic production of commodities such as garlic, is still low,” David said.

Sugar might not taste so sweet this monsoon. Time to sell?


A poor monsoon in 2016 helped propel the market higher as sugar prices received the next booster dose. From a low of Rs 2,165 per 100 kg in July 2015 sugar prices crossed the Rs 4,000 mark by February 2017. Will this rally continue?

Sugar stocks have been trending upward since the second half of 2015 when the first indication of a crop failure was visible. A poor monsoon in 2016 helped propel the market higher as sugar prices received the next booster dose. From a low of Rs 2,165 per 100 kg in July 2015 sugar prices crossed the Rs 4,000 mark by February 2017.

Sugar producers participated in the rally giving multi-bagger returns during this period. Stocks like Dwarikesh Sugar shot up from a low of Rs 23 in August 2015 to a high of Rs 504.90 recently — an appreciation of 22 times.

The key question is whether the party is likely to continue in future or is it over?

A simple answer is a lot depends on monsoon. Sugar as an agriculture crop is a water guzzler. It has unarguably the most sensitivity to monsoon.

Initial estimates suggest that we are headed for a normal monsoon. US Department of Agriculture (USDA) has predicted that India’s sugar production in FY17-18 would touch 25.8 million tonnes, a jump of 18 percent over last year. Indian agriculture bodies are expecting the number to be around the 25 million mark. In both the cases sugar supply is likely to exceed sugar demand of 24 million tonnes.

Sugarcane acerage in the current year has already touched 46.5 lakh hectares as of last week vs 43.9 lakh hectare last year.

Higher acerage is also on account of government introducing an 11 percent increase in Fair and Remunerative Price (FRP) for the upcoming season. This was necessitated by the government as sugar output had dropped to a seven-year low of 20.3 million tonnes in FY16-17. The problem with these government incentives is that they are hard to remove. FRP has been increased from Rs 130 per quintal in FY09-10 to Rs 255 presently. Irrespective of the monsoon FRP remains at elevated levels.

Unlike fertiliser and subsidised petroleum products, sugar industry bears the high input costs. They are unable to pass on these costs and have to absorb them or take a hit on their profitability.

Thus, if 2017-18 happens to be a good year for sugarcane crop, the industry will have to absorb the cost at a time when the price of sugar would be down. A double-whammy for the industry.

Sugar industry posted profits for the first time in seven years as sugar prices rose. But despite higher profits, the industry has not paid back the farmers, in the main sugarcane growing states of Uttar Pradesh and Maharashtra. Any drop in sugar prices is likely to result in the problem aggravating further.

To make matter worse global sugar production is also likely to be a bumper one. USDA has forecasted that world sugar production would rise to 180 million tonnes on higher account from Brazil, India, China, European Union and Thailand.

For the first time in three years world sugar inventory is likely to increase as demand is also likely to come down marginally to 171.6 million tonnes, a drop of 0.3 million tonnes. Many countries in the developed world have imposed a ‘sweet tax’ to check rising cases of obesity. Also, companies in China are increasingly using cane syrup in the final product as compared to sugar.

Headwinds are clearly visible for the sugar sector and if monsoon is normal this year, there is little reason to hold on to sugar stocks.

Council Hopeful National Budget Will Further Promote Interests of Consumers

by jet newspaper

With the 2017-2018 National Budget announcement date nearing, the Council is hoping that the government will again consider the concerns of Fijian consumers in its budget priorities.

We have seen from the past budget announcement that the Government always delivered a balanced budget where consumer needs were considered among st other priorities.

We hope this year’s budget announcement will once again focus on high cost of living to bring relief to the consumers.

more here –…

Sugar prices drive inflation to 7.2%


According to data from the Uganda Bureau of Statistics (UBOS), the Consumer Price Index (CPI) has risen by 0.4 percentage points to 7.2% in May from 6.8% that was recorded in April 2017.

The report further indicates that this is so far the highest the CPI rise since the beginning of 2017. CPI is the official measure of price movements in a basket of goods and services over a given period of time.

Addressing journalists at UBOS offices in Kampala today, Dr. Chris Mukiza, UBOS director of macroeconomic statistics attributed the inflation drive to the rise of sugar prices which rose from 23.9% in April to 45.7% in May 2017.

“The scarcity of sugar has highly contributed to driving up inflation. There is high demand for sugar but less supply on the market,” Mukiza said.

The price of sugar last year stood at 26.7%. Sugar costs between sh5,000 to sh7,000 but mid-2017, the price shot up to sh10,000 from sh2,500 of previous years.

“The prices of sugar are high although it is the main ingredient in in our daily products,” Mukiza said adding that producers were attributing it to the scarcity of sugar cane.

He noted that besides sugar, the prices of food crops such as watermelon, fish and matooke also increased to 23.1% in May from 21.6% recorded in April hence driving up inflation.

The prices of fruits and vegetables also shot up to 37.2% from 35.5% and to 15.5% from 14.0% respectively for the period under review.

In addition core inflation which excludes food, fuel, electricity and metered water which are volatile to price changes, also increased to 5.1% in May from 4.9% recorded in April.  

“Core inflation rose due to an increase in prices of other goods such as processed foods, clothing and footwear and services such as hair dressing, education, rent, health, financial and legal services, hotels and restaurants which rose to 5.6% from 5.1% for the period under review,” Mukiza added. 

Bank of Uganda’s (BoU) medium target is to control core inflation at 5%.  Recently, it cut the central bank rate to 11% in April from 11.5% that was recorded in February.

BoU has continuously tightened its central bank rate (CBR) to control growth in private sector credit.

However, annual energy fuel and utilities (EFU) rose 7.0% from 5.3% that was recorded in April. EFU consists of electricity, charcoal, firewood, petrol, diesel, paraffin and cooking gas.

Unmetered water which is sold in jerrycans increased to 9.9% in May from 2.7%

“The issue of firewood and charcoal contributing to the rise of inflation is due to seasonal factors especially during rainy seasons that make transportation very expensive hence leading to an increase in its price,” Mukiza added.

However, month on month, headline inflation rose by 0.6% from 0.4%rise recorded in April 2017.

UBOS principal statistician Vicent Nsubuga said inflation rise means that consumers have to add additional resources or funds which can be got from savings or borrowing; to increase the amount of money spent.

“This is one of the ways through which consumers can be able to get the same amount of items they have been consuming,” Nsubuga said.

He added that two, they (consumers) can forego some of the goods and service they have been consuming to fit into their budget.

“This can affect the quality of life or the basic needs may not fit into your budget resorting to non-nutrient foods within your budget,” Nsubuga added.

Dr. Fred Muhumuza, senior economist and researcher said Uganda is headed for trouble following the inflation rise.

“People think we are just pessimistic, but Uganda’s trend of growth has been down for the last 15 years,” Muhumuza said.

He noted that there is need for massive reforms for the economy to grow since it is a macro economic issue.

Muhumuza added: “The rise of the dollar rate has affected the economy because a lot of money is spent on payment of debts which are in trillions.”

“If we cannot finance 40% of our budget, how can we be able to save our economy?” he asked

He further added that there is need to restructure the economy such as instead of having massive roads construction, it should be reduced to core road construction.

Lawmakers worry demands on Mexico will increase sugar prices


There’s a growing concern among some U.S. lawmakers and food manufacturers that they’ll see the price of sugar – and the food it’s made with – go up if the sugar refining industry gets what it is demanding from Mexico.

A group of 51 House members has signed onto a letter to Commerce Secretary Wilbur Ross not to go through with some proposals to regulate Mexican sugar imports. The letter, spearheaded by Reps. Danny Davis, D-Ill., and Charles Dent, D-Pa., urges Ross not to consider raising the floor price for raw and refined sugar and funneling some raw sugar imports directly to specific refiners.

“Our candy makers, food processors and soft drink makers – all these people use great quantities of sugar,” Davis told Agri-Pulse. “Their products – some of it – is practically all sugar. For us and our constituents, if sugar prices are too high to use these products, that’s going to have a negative effect on their businesses. I’ve had candy makers go out of business or move away, which has resulted in a loss of jobs in the area.”

Ten senators, in a separate letter, also urged Ross not to push up prices through a new sugar trade deal with Mexico.

“The suspension agreements between the United States and Mexico impose a price floor on imported sugar that is significantly higher than the guaranteed price for domestic sugar,” the senators wrote. “While this policy benefits U.S. sugar growers and refiners, it harms American consumers, who are forced to pay higher prices at the grocery store.”

The U.S. and Mexico have been in talks for months, trying to renegotiate a “suspension agreement” that limits Mexican sugar exports to the U.S. in return for the U.S. not imposing steep antidumping and countervailing duties on Mexican sugar.

Under the current suspension agreement, Mexico is allowed to export up to 53 percent of its sugar as refined product, but U.S. refiners have accused the country of going beyond that limit. So, the U.S. is now demanding that the limit on refined sugar be lowered to just 15 percent, with the remaining 85 percent mandated to be raw.

On May 1, U.S. Commerce Secretary Wilbur Ross announced that the talks had failed and the two countries were at an impasse. He also said that if an agreement was not reached by June 5, the U.S. would activate the duties, essentially cutting off sugar trade with Mexico.

That would be a big mistake, the lawmakers and food industry argue, but so would a new suspension agreement that only takes into account the needs of the U.S. sugar sector and not the food industry.

U.S. sugar refiners, most of whom are represented by the American Sugar Alliance, have not released details of their proposals for what they would like to see in the new suspension agreement, but representatives of the U.S. sugar-using companies say that they and the lawmakers who wrote the letter have seen the details.

The lawmakers stressed that while they understand the desire of refiners to see more imports be in the form of raw sugar as opposed to refined, they are strongly opposed to other proposals.

“While a higher level of raw sugar should be required in the agreements, this must be done without the government picking winners and losers among private companies, so an improved set of agreements should ensure fair competition and not effectively limit shipments to only certain cane refineries,” they said in the letter. “The 2014 farm bill established price support levels for both raw and refined sugar, and Congress has taken no action to authorize the

Administration to increase these support levels, so improved suspension agreements should avoid any reference prices that effectively support U.S. sugar prices significantly above levels debated and approved by Congress, and in no case should reference prices be increased from their levels in the existing suspension agreements.”

The proposals the lawmakers are talking about in the letter originated from U.S. refiners, according to food and candy processing sources. A spokesperson for the American Sugar Alliance said the group was unable to comment. A spokesman for the U.S. Commerce Department declined to discuss details.

“The details of the discussions between Commerce and the Mexican government and industry are not public, but Secretary Ross remains hopeful that a negotiated solution can be reached,” the spokesman said.

Davis and the other lawmakers told Ross that they strongly urge him to “consult with, and take into account the interests of, the companies that make food products and beverages using sugar. … These bilateral negotiations should not be an excuse for the U.S. sugar lobby to extract yet more benefits from its customers through market manipulation that flies in the face of open and fair competition.”

Separately, food industry sources say they are worried that Commerce is considering a proposal to decrease the mandatory polarity (or purity) level of sugar imports from Mexico. That level is now set at 99.5 percent, but if it were lowered to a proposed 99.2 percent, that would make it hard for Mexico to comply with.

What it would do is assure that the sugar coming in from Mexico would need to be refined and thus provide business for U.S. refiners. Sugar that is already refined or even partially refined can often bypass refineries and go straight to food manufacturers.

“The reason the (suspension agreement) came to renegotiation was that the traditional sugar refiners were getting insufficient raw sugar to operate their plants sufficiently,” a food and candy industry representative said. “It is the belief of the lawmakers who signed that letter that much of what’s on the (negotiating) table has nothing to do with the original problem.”