Low-priced Mexican sugar imports have contributed to a significant decline in the performance of the U.S. sugar industry, according to a new investigative report by the United States International Trade Commission.
The report, titled "Sugar from Mexico," was issued a month after the ITC determined that there was a "reasonable indication" that U.S. sugar growers, millers and refiners have been injured as a result of sugar imports from Mexico sold in U.S. at less than fair value.
In the report, the ITC found that Mexican sugar, which is believed to be subsidized by the Mexican government, was sold to U.S. customers at lower prices than U.S. sugar. By "underselling" domestic sugar and increasing import volume, Mexican sugar importers "depressed domestic prices to a significant degree" during the period from October 2010 to December 2013, the report said.
The report also noted that, during the latter half of the investigation, the U.S. government spent $258.7 million to remove 1 million tons of domestically produce sugar from the U.S. market through a combination of forfeitures and purchases. This added further evidence that Mexican sugar imports injured the domestic sugar industry.
Last month, Jim Simon, the manager of the American Sugar Cane League, told NOLA.com | The Times-Picayune that the value of Louisiana's sugar crop dropped by more than $250 million in 2013.
The ITC's report is part of an ongoing investigation conducted in league with the U.S. Chamber of Commerce into allegations that Mexico, whose government owns around 20 percent of the country's sugar industry, is "dumping" sugar on the U.S.
As a result of the findings of the "Sugar from Mexico" report, the Department of Commerce will proceed with its own preliminary investigation and issue a report around June 23. According to the ITC, the report will indicate whether there is cause to impose "countervailing duties," or trade import duties designed to neutralize the negative effects of subsidized imports.