The U.S. Department of Commerce ruled Thursday that cheap sugar subsidized by the Mexican government was unfairly dumped on the U.S. market, causing American sugar producers to lose roughly $1 billion from 2013 to 2014.
The ruling upholds a preliminary finding the department made in August 2014. The U.S. International Trade Commission is set to issue its final ruling on the dumping issue next month.
If the ITC rules in favor of the American sugar industry, then an agreement negotiated between the U.S. and Mexican governments aimed at preventing dumping will be in effect, said Phillip Hayes, a spokesman for the American Sugar Alliance. That will lead to a more fair price for sugar and alleviate the injury that artificially low prices had on the American industry, he said.
If the ITC rules against the sugar industry, then the agreement goes out the window.
Hayes said getting the Commerce Department to rule that dumping happened “was a pretty big hurdle” for the U.S. sugar industry to overcome.
“The DOC’s finding validates our claim that U.S. farmers, workers and taxpayers were harmed by subsidized Mexican sugar flooding the U.S. market,” Hayes said. “U.S. trade law exists to ensure that predatory trading practices like these don’t drive efficient domestic industries out of business, and today proved that the process works.”
In Louisiana, sugar cane was grown in 2014 on 412,351 acres in 23 parishes. The 11 operating raw sugar factories in the state processed 12.8 million tons of cane.
The Commerce Department determines if foreign countries are dumping subsidized products on the U.S. market, while the ITC investigates if dumping caused material injury to U.S. farmers and producers. Hayes said the sugar dumping had a major impact on U.S. prices, causing the market for sugar to be depressed and sugar producers to not get a fair value for their products.
On Aug. 28, the sugar grown and sold by Louisiana farmers traded at about 24.5 cents per pound of raw sugar. In December 2013, when millions of tons of duty-free Mexican sugar hit the U.S. market, the price was just above 20 cents.
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