WASHINGTON, Feb 19 (Reuters) - A deal to set limits on sugar imports to the United States from Mexico would squeeze U.S. sugar refiners and puts the needs of growers and millers first, refiners said on Thursday.
Louis Dreyfus Commodities’ Imperial Sugar Co and AmCane Sugar LLC are challenging agreements hammered out to end a dispute over Mexican sugar exports, which set a price floor and partly rolled back Mexico’s open access to the U.S. market, in exchange for suspending hefty import duties.
Imperial Sugar Chief Executive Michael Gorrell said the deal would crimp supplies of raw sugar and also locked in too much imported refined sugar at a time when there was significant spare capacity in refining.
“In this environment, every tonne of imported, refined sugar hurts, especially when it’s dumped and subsidized,” he told the U.S. International Trade Commission, which is reviewing the suspension agreements signed in December.
Imperial, which accounts for 7.5 percent of sugar produced in the United States, and other refiners buy raw sugar, locally and overseas, and in turn compete with imported refined sugar.
AmCane Chief Executive David Rosenzweig said the agreements set prices for refined sugar too low, guaranteeing underselling. They would also lead to raw sugar shortages and high prices.
“We are getting hit on two sides,” he told the ITC.
“The agreements emphasize grower and miller interests over refiners.”
Mexico has said the agreement is not ideal, but preferable to entering into a bitter trade dispute. Experts have warned that if the dispute escalates, Mexico might take retaliatory action against U.S. exports of high fructose corn syrup.
“Mexico is convinced that the agreements will ensure and maintain the delicate balance in trade of sweeteners between Mexico and the United States,” said Mexican embassy trade official Kenneth Smith Ramos. (Reporting by Krista Hughes; Editing by Marguerita Choy)