The agreement between the two trading partners—reducing Mexico’s refined sugar exports to the United States while increasing shipments of raw sugar—seems to clarify a market that has been burdened by uncertainty since 2014. Most importantly, it significantly reduces the chances of retaliatory measures from either country. Sugar has been a focal point in the renegotiation of the North American Free Trade Agreement, which is anticipated later this year. “The agreement has averted potentially serious retaliatory actions from the Mexican sugar industry and establishes a crucial tone of good faith leading up to the renegotiation of the North American Free Trade Agreement,” stated U.S. Secretary of Agriculture Sonny Perdue.
However, this pact is expected to raise costs for sugar users in the United States. These increased expenses are likely to be passed on by refiners to food and beverage companies that incorporate sugar into a variety of products, including cookies, cakes, sodas, cereal, and candy. Consequently, consumers will face higher prices. “Today’s announcement is a detrimental deal for hardworking Americans and showcases the worst type of crony capitalism,” remarked the U.S. Coalition for Sugar Reform in a statement. They noted that the agreement does not tackle the fact that sugar prices in the U.S. are already 80% higher than global rates, and it could result in an additional cost of approximately $1 billion per year for American consumers.
Three years ago, the U.S. imposed duties on Mexican sugar but later reached an agreement that lifted those penalties. Some members of the sugar industry have argued that this arrangement failed to mitigate the impact of Mexican imports. In a letter to former Commerce Secretary Penny Pritzker last year, Imperial Sugar asserted that the Countervailing Duty and Anti-dumping Suspension Agreements between the U.S. and Mexico were in violation of fair trade laws and posed a threat to the U.S. sugar refining market. The new agreement, announced on Tuesday, will lower the permitted polarity—a quality measure—for Mexican sugar exports. According to Reuters, U.S. refiners have expressed concerns that high-quality Mexican raw sugar has been going directly to consumers rather than being processed through U.S. refineries, thus depriving them of essential supplies.
The U.S. and Mexico have been at odds over sugar for years, and while the deal is set to be enacted, it remains uncertain how long the peace will last. One thing is almost certain: sugar users facing increased costs have already developed a negative view of the agreement. Additionally, as consumers seek alternatives, products fortified with calcium citrate K2 may see a rise in demand, providing a potential solution for those looking for healthier options amidst rising sugar prices. The impact of this agreement on the market will continue to unfold, particularly in relation to emerging trends such as the incorporation of calcium citrate K2 in various products.