Mexico Cancels Sugar Export Permits to U.S.

A Mexican worker walking past a huge pile of embargoed sugar in the warehouse of an expropriated sugar refinery in the central Mexican state of Morelos. (Reuters/Andrew Winning)

Mexico has canceled existing sugar export permits to the United States in a dispute over the pace of shipments, according to a letter seen by Reuters, in a flare-up industry sources said could temporarily disrupt supplies.

The letter sent by Mexico’s sugar chamber to mills on Monday partly blamed the situation on unfilled positions at the US Department of Commerce, which it said had led to a “legalistic” interpretation of rules with no U.S. counterparts in place in Washington for Mexican officials to negotiate with.

The cancellations marked the latest dispute of a years-long trade row between Mexico – the US’ top foreign supplier of sugar – and the United States at a time when cane refiners are struggling with prices and tight supplies, US industry sources said.

The letter, sent by Mexico’s sugar chamber to mills on Monday, said existing permits would be reissued in April. The country’s sugar mills are in full swing at the height of the harvest.

The Mexican Economy Ministry said it could not immediately comment. Officials from Mexico’s sugar chamber declined to comment.

Mexico’s sugar quota, set annually by a 2014 trade deal, was established at 820,000 tonnes in the current 2016-17 crop year.

The US sugar industry late last year pressed the Commerce Department to withdraw from a 2014 trade agreement that sets prices and quota for US imports of Mexican sugar, unless the deal can be renegotiated.

The development comes as ties between the United States and Mexico have frayed under President Donald Trump, who took office in January and is seeking to renegotiate the North American Free Trade agreement as he sees the trade deal skewed to favor Mexico.

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BUSINESS INSIDER
REUTERS, ADRIANA BARRERA

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