Sugar Producer

www.SugarProducer.com 29 "Much will depend on the fate of the suspension agreements—the status quo is not sustainable," Jenkins said, referring to current negotiations between the United States and Mexico to adjust terms of the Dec. 19, 2014, Countervailing Duty Suspension Agreement to increase imports of raw cane for U.S. cane refiners. Cohen attributed much of the rise in global prices to poor crops, bad weather, Brazil's strengthening currency and the emergence of speculators into the market. "Today, the world sugar market has inflows of spec capital and spec demand for futures contracts on a previously unseen scale," Cohen said. "Commodity hedge funds are now the largest buyers of sugar, which is leading to more volatility." U.S.-MEXICAN SWEETENER MARKET Barbara Fesco, director of the Farm Service Agency's Dairy and Sweetener Analysis of the USDA, does not anticipate forfeitures against the government's loan program this year. She expects beet sugar stocks will decline as processors work through 2016 supply. Jack Roney, an economist with the American Sugar Alliance, said "The suspension agreements are not working to eliminate injury to the U.S. industry. "Yet they can be a positive step for U.S.-Mexican sugar trade if adjusted to work as intended." Roney said the U.S. sugar policy is working well for U.S. food manufacturers, consumers and taxpayers. "It's giving American sugar producers a chance to survive in an heavily subsidized and distorted world market," Roney said. Randy Green, a partner at Watson Green LLC and Sweetener Users Association consultant, supports reform not abolition of the U.S. sugar program. Possible improvements would reduce sugar reference prices, change stocks target to 15.5 percent and increase share of "other" sugar, he said. Green also questioned whether a single program can work for both beet and cane. Alexis Taylor, the Agriculture deputy undersecretary for farm and foreign agricultural services, said the sugar program does have multiple interests, referring to the growers, refiners, sweetener users and U.S. relationships with other countries. The USDA is participating in an effort to make changes to the suspension agreements that were put in place to avoid injury from sugar that Mexico was subsidizing and dumping. But under the agreements, Mexico is sending a form of semi- refined sugar rather than the raw sugar that cane refiners need. The semi-refined sugar is also causing stocks of beet sugar to rise. Taylor said the Commerce Department "makes sure the agreements address injury and do not cause injury." U.S. TRADE NEGOTIATIONS Ambassador Darci Vetter, chief agricultural negotiator of the Office of the U.S. Trade Representative, is hopeful the agreement on the 12-country Trans-Pacific Partnership gains passage during the "lame duck" session of Congress. If it's not passed before the end of the year, she said "it may not be done for a long time, if at all." Regarding the 28-nation Transatlantic Trade and Investment Partnership (T-Tip), Vetter said negotiations can address sugar. Vetter acknowledged that T-Tip has become more complicated due to the United Kingdom's vote to leave the European Union. "Neither the EU nor the U.S. industry wants sugar in the T-Tip," said Don Phillips, trade advisor to the American Sugar Alliance. "T-Tip must not be a backdoor for dumped and subsidized Mexican sugar to enter the EU," said Marie Christine Ribera, director general for the Brussels-based European Association of Sugar Producers. U.S. SUGAR POLICY There are weak or no relationships between low sugar prices and both U.S. manufacturing jobs and U.S. retail sugar prices, according to a study titled "Economic Effects of U.S. Sugar Policy" by Alexander Triantis, dean of the University of Maryland's business school. He said there was no evidence in data going back to 1990 that sugar prices affect job loss in the sugar-containing-product (SCP) industry, and, in fact, there was no relationship between prices and SCP jobs. The SCP industry was "faring very well under current U.S. sugar policy," Triantis said, suggesting the SCP industry was somewhat "recession proof" because consumers eat candy when times are good and when times are bad. FOND FAREWELL Sugar industry officials held a special tribute to mark the retirement of Jim Johnson, U.S. Beet Sugar Association president, at the end of the year. Among those taking part were Ryan Weston, Vickie Myers, Don Phillips, Jack Pettus, Jack Roney, Parks Shackelford, Luther Markwart, Carolyn Cheney, Johnson, Kevin Price and Dave Bieging.

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