Mexico Seeks REVENGE on Trump By Cancelling Sugar Exports to U.S., Sugar Costs To RISE
Mexico is seeking revenge on Trump and has canceled sugar export permits to the United States in a fight over the speed of shipments, according to a letter seen by Reuters. The letter was sent by Mexico’s sugar chamber and blamed the cancellation on Mexico not being able to negotiate with Trump’s officials and administration. Mexico is the top exporter and supplier of sugar to the United States. U.S. industry sources say that sugar cane refiners in the U.S. are already having a tough time due to pricing and supply, so this is certainly Mexico kicking the U.S. sugar industry when it’s down.
The U.S. domestic raw sugar contracts on ICE Futures settled at their highest prices in nearly five years. The economics of this situation are basic and mean that we will all be paying more for sugar if Mexico and Trump can’t get along. We buy sugar from Mexico because its sugar is the best sugar for the lowest price, plain and simple. If there was better sugar for a similar price, we would be importing from that seller instead. Any cut in imports of sugar from Mexico will result in higher prices because U.S. companies will have to buy from another supplier. Other suppliers may also take advantage of the sugar export cancellation and charge even higher prices.
Mexico can pull this off because since they are the supplier of the best sugar for the best price, they can easily just sell to another country (s). Sugar is a high demand product, sort of like gasoline, which basically sells itself.
Richard Pasco, president of the Sweetener Users Association trade group said, “We need adequate supplies and the lack of resolution is a problem.” Thank Trump for the soon to come rising prices of just about everything.