Pacific Rim pact to boost Canada's access to U.S. sugar market
NEW YORK (Reuters) - The landmark Pacific Rim trade deal will boost Canada's access to the U.S. sugar market by 19,200 tonnes, a trade group said on Wednesday, making it the second nation to gain greater access to the coveted U.S. sugar market through the pact agreed this week.
That includes 9,600 tonnes refined sugar quota through the Trans-Pacific Partnership (TPP), on top of the existing 10,300 tonnes it currently has through World Trade Organization (WTO) commitments, said Sandra Marsden, president of the Canadian Sugar Institute.
The TPP also includes a boost of 9,600 tonnes of quota for sugar containing-products, said Marsden. Canada currently has a quota of 59,250 tonnes for those products.
The news comes after protracted talks for the 12-country deal during which sugar had been considered a sticking point. Australia, the world's third-largest exporter, will get a boost of 65,000 tonnes and a larger share of any discretionary quota increases in years to come.
The U.S. market is a coveted destination for the sweetener, as local prices trade at a significant premium to global levels due to a complex network of import restrictions and price guarantees.
"This is a step in the right direction, but it's small in relation to the 11-million-tonne U.S. sugar market," Marsden said.
The U.S. government doles out a minimum of 22,000 tonnes for refined sugar under existing WTO commitments and of 1.1 million tonnes quota for raw supplies.
For refined sugar producers, the increase is significant. Additional quotas are rarely doled out for the white sugar and has not been increased since the 2011/12 fiscal year, Marsden said.
U.S. domestic raw sugar futures traded on ICE Futures U.S. traded up 0.69 cent, or 2.8 percent, at 25.44 cents a lb by 12:23 p.m., the highest since the January 2015 despite the news. Continued...