(Chuck Muth) – For the first time in six years, India – the world’s biggest sugar producer and #2 sugar exporter – has imposed export restrictions “to prevent a surge in domestic prices.”
According to a recent Reuters story, the government will cap this season’s exports at 10 million tons.
This, combined with a shift by Brazil – the world’s #1 sugar exporter – to produce more sugar-based ethanol rather than consumer sugar, is likely to tighten up global supplies and result in higher sugar prices on the world market.
For years, lobbyists for Big Candy have been advocating for the elimination of the U.S. sugar program of targeted tariffs and import quotas by pointing to lower sugar costs from foreign countries that subsidize the production of the commodity and/or its export.
Without those foreign subsidies, world market prices would be more in line with U.S. prices, which have remained steady and predictable for decades.
In addition, domestic U.S. sugar has not suffered the problems being caused by global supply chain disruptions.
Imagine the crisis if sugar prices skyrocketed the way gasoline has over the last several months.
Imagine the crisis if the U.S. sugar industry disappeared – as has already happened in Hawaii – and we had to rely on unreliable foreign sugar, subsidized or not.
The U.S. sugar program is a critical defense of a critical industry against “cheaters” in other countries that wildly distort the true market cost of production.
And until such countries agree to go “cold turkey” on their subsidies, Congress needs to keep the U.S. sugar program in place.
Free Market Sugar is a project of Citizen Outreach, a non-partisan grassroots advocacy organization
