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.”

Milk prices to drop by Sh10 tomorrow, says CS Bett


You will pay Sh10 less for a packet of milk from Thursday, Agriculture CS Willy Bett has said.

Bett said the drop resulted from government interventions to stabilise basic commodity prices that have skyrocketed due to drought.

This means a 500ml packet of fresh milk will now cost Sh55 while UHT packets of the same size will retail at Sh65.

The pricing will take effect on June 1 which is World Milk Day.

During a press conference on Wednesday, Bett also announced that

sugar prices will stabilise in two weeks. He said a kilogramme will cost about Sh100.

The CS

this follows the government’s decision to do away with duty on sugar imports from COMESA countries.

Bett noted the high sugar prices were

worsened by the scarcity of the commodity in the COMESA region.

“The countries could not meet the quotas we normally give,” he said.

“I assure Kenyans that in a week or two, the price of sugar might be the lowest they have ever seen,” he said, adding the effects of interventions cannot be felt immediately.”

He added that the removal of duty on sugar imports will see a 50kg bag retail at Sh5,500 from between Sh8,000 and Sh9,000.

Uganda – GM, Mayuge Sugar Factories to Be Relocated


Jinja — Government will relocate GM Sugar Uganda Limited and Mayuge Sugar Industries Limited (MSIL) to other areas in a bid to minimise sugar cane growing which has caused famine, poverty and environment degradation in Busoga sub-region.

This revelation was made by the State minister for Karamoja Affairs, who is also the Bugabula North County MP, Mr Moses Kizige.

Big Sugar’s Assault on the 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 U.S., 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 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 located 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 U.S. 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 portion 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.

Traders raise sugar, garlic prices to record highs


The prices of sugar and garlic have surged to record highs at Tk 82 a kilogram and Tk 400 a kg respectively in the city markets as traders have increased the prices of daily essentials excessively in recent weeks.

The prices of sugar and garlic have surged to record highs at Tk 82 a kilogram and Tk 400 a kg respectively in the city markets as traders have increased the prices of daily essentials excessively in recent weeks.

Belying the commerce minister Tofail Ahmed’s repeated assurances that the commodity prices would remain stable during Ramadan, the prices of sugar and garlic rose twice in the city markets after the start of the fasting month for the Muslims on Sunday.

On May 23, the commerce minister had said that there was no reason to increase the prices of essentials as the stock of Ramadan commodities including sugar, gram, pulse, edible oil, onion and garlic remained much higher than the demand for the items.

‘I want to assure and to give you the guarantee that the prices of essentials will not increase in the month of Ramadan,’ Tofail had said.

However, the price of sugar increased by Tk 5 a kg on Monday after a Tk 2 rise on Sunday, the first day of Ramadan. Sugar was selling at Tk 80-82 a kg in the city market on Tuesday.

The price of sugar rose by Tk 7 a kg in last one week while the price of the item surged by Tk 17-18 a kg in last one month.

Retailers said that delayed delivery by the sugar refinery companies created a supply shortage of the product at the market.

Some wholesalers alleged that the mill authorities were issuing two types of supply orders — current SO and normal SO — to the traders.

Those who are buying current SOs at high prices are receiving delivery of sugar within a short time while the delivery to the traders who are buying normal SOs are taking more than one month, they said.

A mobile court run by the Dhaka North City Corporation on Tuesday fined Ibrahim Store, a wholesale shop of sugar at Karwan Bazar, Tk 2 lakh for charging extra price for sugar.

During the drive of the mobile court, Ibrahim Store could not provide any valid money receipt for buying sugar from factory.

The mobile court also fined 10 other shopkeepers at the Karwan Bazar kitchen market for not keeping price list at their shops.
The price of imported garlic increased by Tk 50-80 a kg in last two days and the price of the item hit a record high at TK 370-400 a kg on Tuesday.

On Sunday, the price of imported garlic had increased by Tk 70 a kg.

The price of imported garlic increased by Tk 140-150 a kg in last one week.

On Tuesday, the price of onion increased by Tk 5 a kg and its local variety was selling at Tk 30-38 a kg in the city markets.

The prices of other daily essentials, including rice, vegetables, gram and pulse became costlier in recent weeks.

Need to be competitive


President Duterte has just certified as urgent the tax reform bill in order to ensure the timely and full passage of the tax reform package before Congress ends its session on June 2.

The bill provides for, among others, a higher excise tax on sugar-sweetened beverages. As proposed, sugar-sweetened drinks will be slapped a P10 a liter excise tax in the first year of implementation. In the succeeding years, the tax rates will be increased by four percent annually.

According to the DOF, an additional P47 billion could be generated from taxes on sugar-sweetened beverages, whether in liquid or powdered form.

Finance Secretary Carlos Dominguez earlier said this would serve not only as a revenue but also as a health measure similar to the implementation of the “sin” tax reform aimed at safeguarding public health.

But according to Steven Cua, president of the Philippine Amalgamated Supermarkets Association (PAGASA), the new tax would have a grave impact on the sugared beverage industry and its manufacturers, with the cost being passed on to the poor consumers as higher retail prices.

And because the price of sugar bought in the Philippines is still high compared to other imported sugar and sugar substitutes, manufacturers of sugar-sweetened beverages may be left with no choice but to look for cheaper imported sweeteners.

Beginning 2015, the Philippine tariff on raw and refined sugar imported originating from ASEAN member countries was reduced to five percent. It is, however, in the so-called sensitive list just like in Thailand, unlike other goods where intra-ASEAN tariff rate is now down to zero.

The Philippine sugar industry insists that the protection is needed given the inherent disadvantages that the local sector faces, such as the agrarian reform program that has caused banks to refuse to accept agricultural lands as collateral for loans, the subsidies which other foreign government give to their sugar industry, among others.

Observers say the excise tax is meant to force sugar manufacturers to shape up, to modernize, to produce other sugar-based products like ethanol, and to reduce costs and prices in order to be able to compete with sugar substitutes like high fructose corn syrup (HFCS) and other sugars produced in the region.

The other message is that beverage manufacturers should start using alternative sweeteners in order for their products to remain affordable.

The problem is, sugar producers want higher tariffs on imported HFCS and other sweetener, blaming imports by beverage companies and food producers for the continued drop in sugar prices in the country.

At present, HFCS coming from China is tariff-free while those coming from South Korea are slapped a tariff rate ranging from one percent up to seven percent.

From 50,000 metric tons in 2010, HFCS imports are said to have risen to 370,000 tons last year.

Sugar industry leaders have also opposed the planned excise tax on sugar-sweetened beverages, with some proposing at least a five to six-year exemption from this or at leased a staggered implementation.

For its part, the Export Development Council (EDC) of the Philippines said that imposing an excise tax on a single product alone is regressive and unfair, especially considering that the beverage industry is one of the key export sectors cited in the Philippine Export Development Plan (PEDP) 2015-2017.

The EDC noted that the bill being rushed by Congress would hamper the growth of the beverage industry, the local sugar industry, and fruit farming as well, due to the expected decline in demand for fruit juices and sugar.

Agriculture Secretary Manny Piñol has warned that the sugar industry needs to modernize and produce sugar at competitive prices with the ASEAN market integration, otherwise “we will have problems.”

Too much gov’t is bad

Is the Philippine Competition Commission (PCC) superior to the Department of Information and Communications Technology (DICT) and the National Telecommunications Commission (NTC)?

By law it isn’t. But by the way it is acting lately, it seems to want to assert its superiority over the two other agencies in charge of the telecommunications industry.

In fact, the PCC has questioned before the Supreme Court the ruling of the Court of Appeals’ (CA) blocking the commission’s review of the PLDT-Globe acquisition of San Miguel Corp.’s telecom assets. No less than the NTC has said that the deal is good for the industry.

PCC chair Arsenio Balisacan has said they would not back down or be intimidated by companies who have grown accustomed to unregulated business practices that hamper competition that ultimately hurt the consumers.

Is the PCC, in effect, saying NTC and DICT have not been doing their jobs? After all, only the NTC and DICT are by law the mandated regulators and policy-setting agencies for the telco and ICT sectors.

PCC, let’s face it, does not have the administrative and technical expertise to decide on matters such as what is good for the telecommunications industry. It insists that the sale of the SMC telco assets, which include the much-sought-after 700 megahertz radio frequencies, will kill competition in the telco sector. But would it rather than these frequencies remain unused when they could be put to better use by PLDT and Globe?

In fact, after the NTC allowed the co-use by PLDT and Globe of the frequencies, the two companies immediately announced plans to invest billions of pesos in improving their services in compliance with President Duterte’s directive for telcos to shape up.

The NTC approved in May 2016, the co-use by PLDT and Globe of the frequencies held by SMC, with NTC deputy commissioner Edgardo Cabarrios citing the deal and the co-use of frequencies as a “clear benefit to the public.”

Akamai, an international content delivery network services provider, has cited the impact of the utilization of new frequencies to which PLDT Inc. and Globe Telecom Inc. gained access after their purchase of San Miguel Corp.’s telecom business.

Following its use of the acquired frequencies, Smart Communications reported improvements in terms of mobile internet speed averaging at 13.9 megabits per second (mbps) – better than Australia and Japan which recorded 12.8 mbps and 11.6 mbps respectively.

Globe, meantime, said “it has achieved its target Long-Term Evolution (LTE) network rollout using the 700MHz in 500 cell sites within 2016, mostly deployed in Metro Manila and other highly populated areas.”

Observers cannot understand the PCC’s refusal to recognize the deal, which under its implementing rules prevailing at the time of the sale, was exempt from PCC review. There are those who even suspect the PCC wants the frequencies to go to someone else.

Others meanwhile complain why the PCC has been over-eager in its bid to stop the PLDT-Globe-SMC deal, while being lackluster in its actions with regard to complaints of anti-competitive behavior against cement manufacturers.

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Sugar output breaches target price of sugar

from manila times

The sugarcane sector performed better than expected this crop year as production exceeded the target despite the lingering effects of El Niño, the Sugar Regulatory Administration said.

As of May 28, sugar production totaled 2.33 million metric tons (MT), from 2.21 million MT a year earlier, the industry regulator said in a report. The output has surpassed the 2.25 million MT target this crop year.

more here –…

Bitter truth about sugar


Uganda and Kenya are learning a bitter truth about ordinary added sugar used in homes, industries, and service facilities. Just six months ago in September 2016, the two countries were fighting a trade war over sugar. Uganda wanted to export sugar to Kenya because it claimed it had a surplus. Kenya blocked the export claiming Uganda was repacking third party to exploit regional trading agreements.

Now the two countries face a grim reality. One has run out of sugar, the other has sugar but is hurting from hiked retail prices.

On May 07 Kenya announced it was to import 100, 000 tonnes of sugar to counter biting shortage. At the time, a kilo of sugar was retailing at KShs350 (Approx. UShs13, 000). It was cheaper on the Uganda side (retailing at Shs7000 at Busia border) and Kenyans were smuggling it across. Before that it had been at Shs5000 on the Ugandan side and Kshs200 (Approx.Shs7000) across.

A similar scene was playing out on the Kenya-Tanzania border. Sugar was being bought in Tanzania for about Kshs100 and sold on the Kenyan side at KShs200. Tanzania produces 520 metric tons of sugar annually and has demand of 300 metric tons.

While the Tanzanian government, like Kenya, reacted by ordering the country’s sugar board to import sugar to cover the deficit, the minister of Trade in Uganda reacted by attempting to fix the price at Shs5000. Fixing the sugar price is anachronistic in the context of Uganda’s liberalised trading regime and it is not clear what law the minister would use to punish traders who offend her directive.

The Minister’s intervention could have been prompted by a perception that Uganda was not facing a sugar shortage but rather a speculative spike in the price of sugar driven by deliberately imposed local supply chain hurdles and external demand from the region.

This presents two immediate lessons for Uganda. One, that Uganda needs a long-term sugar strategy, and two, that it should be pushing for an integrated East African sugar strategy.

A regional strategy is critical because indications are that the current sugar crisis in Uganda is foreign induced; resulting from official and non-official export of the commodity to neighboring countries. While protectionist regulations and subsidy regimes are not uncommon in cross-border dealings in sugar, which is a very political commodity, EAC member states need a regional outlook.

In this context, Uganda’s Ministry of Trade claim that “Uganda has a sugar surplus” is fallacious. The reality is that Ugandans are consuming less sugar than they should – because they are poor and cannot afford it. They also cannot meet regional demand. The sugar situation in Uganda is likely to get direr as the population increases, becomes richer, and more added sugar consuming industries and services are opened locally and regionally.

Currently, each Ugandan on average consumes about 8kgs of sugar per year or 22 milligrams per day. That is too little because one teaspoon of sugar is 4000 milligrams and the recommended daily intake of added sugar is six teaspoons for women and nine for men.

Make no mistake; some Ugandans are obese from over-consumption of sugar. But the figures cited here simplistically take total sugar available and divide by total population. It follows that as Ugandans become richer, they will take more sugared tea, coffee, juice, bread, biscuits, cakes, and more and the so-called surplus will disappear.