ASSESSMENTS

Latin America's Sugar Producers Sweat the Sweet Stuff

Dec 12, 2017 | 08:00 GMT

According to some estimates, the European Union's annual sugar imports will fall from 3 million metric tons (3.3 million tons) to 1.8 million metric tons by 2025 now that the bloc has lifted its production ceiling. European sugar exports, meanwhile, will nearly double from 1.3 million metric tons per year, where they have been capped for half a century.

(Andree_Nery/iStock)

Highlights

  • The European Union's decision to end its sugar production quota will prompt producers in Latin America and the Caribbean to look for ways to deal with the growing sugar supply.
  • To that end, Brazil will bet on its ethanol industry, while Mexico will focus on trying to keep its access to the U.S. market.
  • Despite its efforts to liberalize other sectors of the economy, Argentina will keep high import tariffs in place to protect its sugar domestic market from external competition, and countries in the Caribbean will follow suit. 

The world's major sugar producers recently got a bitter surprise. In October, the European Union lifted restrictions on its sugar production that had been in place to keep prices stable since 1968. The European Commission estimates that the bloc's annual sugar imports will fall from 3 million metric tons (3.3 million tons) to 1.8 million metric tons by 2025. European sugar exports, meanwhile, will nearly double from 1.3 million metric tons per year, where they have been capped for half a century. The end of the EU production quota, coupled with the bloc's enduring tariffs on imported sugar, will force traditional sugar exporters in Latin America and the Caribbean to look for ways to deal with the heightened competition....

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