ASA Newsroom

Sugar Subsidies Spur Surplus and Sour Market

CONTACT: Phillip Hayes, 202-271-5734 (cell)

From the International Sweetener Symposium:

STOWE, Vt.—Attendees of the 31st International Sweetener Symposium were told today that a four-year sugar surplus is weighing on global prices.

Growing sugar consumption in developing countries could help lower stocks over the long haul, but global sugar supplies will remain large in the near term, explained Jose Orive, executive director of the International Sugar Organization. And the world’s sugar stocks-to-use ratio – a common measure of surplus – will remain at an abnormally high 40 percent for at least another year, he said.

Despite the falling prices, Thailand, the world’s second largest sugar exporter, “has been on an aggressive expansion path,” Orive said. Meanwhile, India will only decrease production slightly for the upcoming crop.

Brazil, which commands half of all global exports, is also expected to maintain similar production levels in the 2015 and 2016 crop years, even though it is currently embroiled in drought. Brazilian sugarcane ethanol production should increase, Orive told the group.

Jack Roney, an economist with the American Sugar Alliance, believes global subsidies have insulated many foreign sugar producers from market volatility and have helped build the surplus that cut prices in half from their most recent peak in 2011.

He said Brazil benefits from more than $2.5 billion in annual sugar subsidies and noted America’s desire to end global subsidization in favor of a free market.

Mexican policies, Roney explained, are particularly harming U.S. producers because record amounts of subsidized Mexican sugar are being dumped onto the American market. U.S. producers have filed antidumping and countervailing duty cases against Mexico and have asked the U.S. government to impose corrective measures to level the playing field.

Frank Jenkins, a sugar market analyst, told the group he expects U.S. producers to prevail in the cases. And until they do, he said, the U.S. market will remain in flux.


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About Phillip Hayes

Phillip Hayes is the Director of Media Relations for the American Sugar Alliance. He can be reached on cell at 202-271-5734 and on email at
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