| ORLANDO, Fla., Feb 12 (Reuters) - The U.S. sugar program
providing supports for local producers is coming under increasing strain
and changes must be made when talks on the new Farm Bill come up,
officials said Monday.
``I think the (sugar) program is imploding,'' Sen. Pat Roberts
(R-Kansas) said in a keynote speech at the start of the annual Sweetener
Colloquium in Orlando.
The program has come under persistent criticism by keeping domestic
prices high and encouraging overproduction, especially beet sugar.
U.S. domestic sugar prices are currently hovering at just above 21
cents a lb while world raw sugar prices were holding slightly below 10
cents.
American sugar producers have countered as strongly that they favor a
liberalized sweetener market so long as subsidies like in the European
Union are eliminated and enterprises dominating sugar trading as in
Australia are done away with.
Jack Roney, economic director of the industry group American Sugar
Alliance, told Reuters the ``program needs some adjustments.''
Robert Coker, vice president at United States Sugar Corp. in Clewiston,
Florida, said in a separate interview that almost every agricultural
commodity in the country, including sugar, has had to contend with
severely depressed prices.
``Farming is a national security issue,'' he said, adding changes to
the U.S. sugar program are tough to consider when groups like the European
Union recently deferred to much later suggestions on reforming its own
sugar regime.
The U.S. sugar program has again drawn attention after Tate & Lyle
(quote from Yahoo! UK & Ireland: TATE.L)
issued a profit warning that severe problems in an oversupplied U.S. sugar
market had squeezed profit margins at its Domino cane refining and Western
beet processing units.
Tate is selling its Western beet factory to the Rocky Mountain Sugar
Growers Cooperative and is seeking a buyer for Domino.
U.S.-MEXICO SUGAR DISPUTE TAKING CENTER STAGE
Analysts attending the conference said the bitter dispute over
sweetener trade between the United States and Mexico will also be grabbing
some of the limelight when U.S. President George W. Bush embarks on his
first foreign trip on Friday by going to Mexico for talks there with
President Vicente Fox.
The dispute has simmered since talks broke down over Mexican demands
that it be allowed to ship as much as 600,000 tonnes of its surplus sugar
to the U.S. as part of commitments to liberalize sugar trade under the
North American Free Trade Agreement (NAFTA).
The U.S., citing a side-letter that Mexico has rejected, said its
southern neighbor is only entitled to ship a little over 110,000 tonnes.
Mexico has decided to raise the matter with a NAFTA arbitration panel.
Jose Pinto, the vice chairman for International Affairs with the
Mexican Sugar Chamber, said in a speech at the conference here that Bush
and Fox ``will have to touch on issues that have irritating'' ties between
the two countries. He said the U.S. and Mexico must start planning ahead
to the time in 2008 when a common sweetener market is supposed to be
established under NAFTA.
The pressure from prospective Mexican sugar exports to the U.S. may be
reduced this year, according to Sparks Cos. tropical products research
analyst Gregory Harnish.
He said in a report sugar production in Mexico ``is lagging
considerably behind last year's pace and is unlikely to recover by the end
of (the) harvest. Mexico may not achieve surplus producer status for
2001/02 and would, thus, receive only a minimum boatload import quota (of)
7,258 tonnes.'' |