Mexico Could be the Winner in Sugar Trade Deal

With a closer look, however, it appears that big cane refiners – including the maker of household brand Domino Sugar – might be the biggest losers because the deal could choke off imports of raw sugar from Mexico, cutting critical feedstock.

The pact setting quotas and prices on Mexican sugar imports for the first time appeared to be the best possible outcome to a months-long dispute that had threatened to escalate into an all-out trade war.

Facing global refined prices languishing at multi-year lows and a market that has been in surplus for years, U.S. sugar producers accused Mexico in March of flooding the heavily protected U.S. market with cheap, subsidized refined sugar and called for penalties on imports.

Domino, the top U.S. refiner, is owned by ASR Group, which is the only cane processor that signed onto that case.

For Mexican mills and U.S. food manufacturers such as Hershey Co, the eleventh-hour deal might be a better alternative to the import penalties threatened by the trade case. The new reference prices are about half those including duties.

The U.S. Department of Commerce has slapped duties of over 50 percent on imports, but has said it will drop them if the pact is sealed.

Refiners not involved in the trade case, such as Louis Dreyfus Commodities BV, which owns Imperial Sugar, are also worried, according to filings to the Commerce Department on Tuesday ahead of the deadline for comment.

Six of the country’s 10 cane refineries, which represent some 4 million to 4.4 million tonnes of capacity, are located at ports, rely on imports and would be starved of raw sugar, Imperial Sugar’s President and Chief Executive Officer Michael Gorrell said in a letter.

“Mexican exporters could ship all of their sugar quota to the United States as direct consumption sugar,” he said.

Alongside relatively low reference prices, the possibility for Mexico to skirt refiners with their exports should be “particularly concerning,” said Frank Jenkins, president of Connecticut brokerage JSG Commodities and a veteran trader.

The alarm from within the U.S. sugar industry might surprise many market participants who viewed the influential lobby as having the most to gain from restrictions on refined sugar imports after pushing for years to end free trade with Mexico.

Tweaking the terms to assuage the U.S. industry might also delay the deal, increasing the uncertainty about supplies and boosting domestic prices.

U.S. refiners ASR Group, Imperial Sugar and U.S. Sugar Corp declined to comment on this story. Cargill Inc and AmCane Sugar did not respond to requests for comment.

REFINED VS RAW

One of the central worries is the definition of refined sugar in the agreement as having a minimum polarity, a measure of purity, of 99.9 percent. Refiners believe that will skew how much and what Mexico imports through the new quota system, expert trade sources said.

Mexican sugar above a 99.5 percent polarity, but under 99.9 percent would not technically be refined under the new deal, potentially dealing a double whammy to refiners.

While refined sugar will still be flowing in – perhaps even more heavily because of limits in the draft proposal – it will be categorized as raw under the government’s standards.

The 99.5 percent polarity sugar can be sold directly to food manufacturers, sidestepping refiners, and is used in drinks or as sugar crystals in baked goods where the whiteness of the sugar does not matter, traders said.

Refiners’ options for alternative supplies are limited by the so-called tariff rate quota that permits imports from elsewhere if the U.S. government deems the market to be short.

“Their access to (Mexican raw sugar) could disappear,” said Tom Earley, a food policy consultant at Agralytica in Virginia who consults for the Sweetener Users Association, which opposes restrictions on imports. (Editing by Josephine Mason. Editing by Andre Grenon)

With a closer look, however, it appears that big cane refiners - including the maker of household brand Domino Sugar - might be the biggest losers because . . .

Follow Us On Google News | Get Our Newsletter



Trending News on PVDN

  • puerto-vallarta-rainfall-hurricane-flossie-july-2025Puerto Vallarta braces for torrential rains as Hurricane Flossie gains strength Puerto Vallarta faces a high risk of flooding as Hurricane Flossie intensifies in the Pacific. Torrential rains and overwhelmed drainage systems pose major challenges for the city. Puerto Vallarta, a city wedged between the Sierra Madre mountains and the Pacific Ocean, is no stranger to dramatic weather shifts—but this summer, the skies are testing the…
  • raw-sewage-playa-los-muertos-puerto-vallartaMore Raw Sewage Dumping at Playa Los Muertos Appear to Come From Local Hotel Business owners in Puerto Vallarta are demanding action after raw sewage was discovered leaking onto Playa Los Muertos, raising public health and tourism concerns. A raw sewage leak at Playa Los Muertos in Puerto Vallarta has sparked outrage among local tourist service providers and business owners, who say the contamination is driving away visitors and…
  • hurricane-flossie-strengthens-july-1-2025Hurricane Flossie will bring tropical storm conditions to parts of Guerrero, Michoacán, Colima, and Jalisco Hurricane Flossie intensifies off Mexico's Pacific coast with winds near 90 mph. Heavy rain, flooding, and tropical storm conditions expected in parts of Guerrero, Michoacán, Colima, and Jalisco. Hurricane Flossie continued to intensify early Tuesday morning as it moved west-northwestward off the coast of southwestern Mexico, prompting tropical storm warnings and watches across multiple states.…
  • Where do foreigners come from and where do they live in MexicoMexico City Protest on July 5 Challenges Gentrification and Airbnb’s Impact on Housing Residents of Roma and Condesa will gather at Parque México on July 5 to protest gentrification, rising rents, and Airbnb’s effect on local housing. This Saturday, July 5, Mexico City will witness its first organized citizen protest against gentrification—a peaceful but urgent gathering taking place at 3:30 p.m. at the Lindbergh Forum in Parque México,…
  • cabo-corrientes-warning-canceled-hurricane-flossieCabo Corrientes Spared as Hurricane Flossie Warning Lifted, But Pacific Coast Still at Risk Cabo Corrientes no longer under tropical storm watch as Hurricane Flossie nears Mexico's Pacific coast, with dangerous winds and heavy rains threatening Michoacán, Colima, and Jalisco. The tropical storm watch for Cabo Corrientes was officially canceled Tuesday, offering a measure of relief for the scenic coastal town as Hurricane Flossie continues to churn off Mexico’s…
  • no-damage-jalisco-hurricane-flossieNo Damage Reported in Jalisco as Hurricane Flossie Moves Away While Mexico's Weather Service predicted heavy rains, Hurricane Flossie causes no damage along Jalisco’s coast. The Category 3 storm brings light rain and moderate waves as it moves away from the region. The coasts of Jalisco remain calm and largely unaffected following the passage of Hurricane Flossie, a powerful Category 3 storm that is now…
  • cancun-2025-sargassum-beaches-and-activitiesSargassum won’t ruin your Cancun vacation, there are plenty of clean beaches and tourist activities As the 2025 sargassum season continues through September, visitors to Cancun can still enjoy clear beaches like Playa Delfines and Playa Caracol. As the 2025 sargassum season intensifies across Quintana Roo, tourists are finding it more difficult to enjoy the region’s iconic white-sand beaches without encountering the unsightly brown seaweed. While the influx of sargassum…
  • tropical-storm-flossie-hurricane-mexico-pacific-coastTropical Storm Flossie to Strengthen into Hurricane as It Tracks Along Mexico’s Pacific Coast Tropical Storm Flossie is expected to become a Category 2 hurricane by July 2 as it moves parallel to Mexico’s Pacific coast, bringing dangerous rainfall, wind, and surf. Tropical Storm Flossie is on the verge of forming from Tropical Depression Six-E and is forecast to strengthen rapidly into a hurricane as it parallels Mexico’s southwestern…
  • oregon-murder-fugitive-extradited-puerto-vallartaFugitive Wanted for 2008 Oregon Homicide Captured in Puerto Vallarta and Extradited to U.S. Jesús Rodríguez Borrayo, a fugitive for 17 years, was extradited from Mexico to Oregon for his role in a 2008 drive-by shooting that left one dead. He was located in Puerto Vallarta. A man wanted for murder and other violent crimes in the United States for nearly two decades has been extradited after being found…
  • tropical-wave-7-floods-bacalar-chetumal-emergency-responseTropical Wave Floods Bacalar and Chetumal as Navy and Army Activate Emergency Plans Torrential rains from Tropical Wave 7 flood Bacalar and Chetumal, prompting emergency response from the Navy and Army. Several towns remain isolated in southern Quintana Roo. Torrential rains caused by Tropical Wave Number 7 have flooded multiple communities in southern Quintana Roo, prompting a joint emergency response from Mexico’s Navy and Army. Authorities activated their…
Scroll to Top