Regional sugar producers want tariff enforced on imported white sugar

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Regional sugar producers want tariff enforced on imported white sugar

Tuesday, August 13, 2019

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BRIDGETOWN, Barbados (CMC) — The Sugar Association of the Caribbean (SAC) is urging Caribbean Community (CARICOM) governments to strengthen the regional market for Caribbean white sugar by enforcing the Common External Tariff (CET) on imported white sugar.

In a statement posted on its website, the SAC said it may surprise Caribbean consumers to know that currently the lemonade or cola that they drink is nearly always made with sugar shipped from Guatemala, Brazil, Colombia or Mexico rather than locally produced sugar in the Caribbean.

It said the reasons for this are historical, and a result of longstanding preferential trade agreements with the EU, that provided regional producers with a guaranteed high market price for raw cane sugar.

But the SAC said that these preferential arrangements came to an end in October 2017, leading to an increase in European production of beet sugar, and leaving Caribbean producers to sell their sugar at world market prices -- a situation not faced by any other sugar producer worldwide.

“SAC is campaigning for a change in the trade rules for CARICOM governments to adopt as soon as possible the same approach as every other sugar producing region on the planet, thereby creating the right market conditions for a sustainable and successful future for the Caribbean sugar industry.”

The SAC said the solution it is putting forward to CARICOM and regional governments is to strengthen the regional market for Caribbean white sugar by enforcing the Common External Tariff on imported white sugar.

“This would allow investment in production to proceed and allow regional producers to focus on supplying the needs of their natural customers – manufacturers of products like lemonade and cola in the region who are the most significant buyers of white sugar.”

The SAC said that around the world, sugar producers supply their local markets first, noting that governments encourage this by placing tariffs on imported sugar from overseas.

“Local producers then sell any excess sugar that they can't sell locally on the world market. Because sugar on the world market is “excess”, the price varies hugely depending on global demand and supply.”

The SAC, a trade association supporting the interests of sugar producers within CARICOM, warned that without “any barriers to this cheap world market sugar entering the market, it becomes uneconomic to invest in regional production of the higher value sugars – at present, the most expensive to produce highly refined sugars are often available in CARICOM even more cheaply than unrefined raw sugar.

“Selling Caribbean sugar on the world market year-on-year for CARICOM producers is simply not an option, with a highly volatile commodity price and volumes of sugar being sold on the world market being sold even below the production cost of the lowest-cost producers such as Brazil,” said the SAC, which represents four national sugar industries with competing sugar mills and production across Jamaica, Guyana, Belize and Barbados.

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