Sugar Standoff: U.S. & Mexico Race To Ink Deal On Exports To Head Off Higher Prices

The United States and Mexico must reach an agreement Monday on how to structure Mexican sugar exports to the U.S. or the Department of Commerce will begin antidumping and countervailing duties that could top a combined 80 percent, Height Securities reports.

If no deal is reached, Mexico will likely retaliate against U.S. high fructose corn syrup and other sweetener exports.

This has drawn concerns from corn refiners such as Archer Daniels Midland Company ADM, Bunge Ltd BG and beverage companies like The Coca-Cola Co KO.

Mexican Economy Minister Ildefonso Guajardo said the two sides have come closer to a deal, but there is no guarantee that an agreement will be reached.

How The Sugar Turned Bitter

In 2014, the American sugar industry petitioned for AD/CVD relief. The Department of Commerce, backed by the U.S. International Trade Commission, found preliminary evidence of material injury by Mexico.

The investigation was suspended though, after U.S. officials reached a deal with Mexico in December 2014 to impose quotas and a price floor.

The domestic sugar industry then petitioned for an administrative review of the agreement, which the Department of Commerce has since extended twice — up to Monday, the maximum amount of time permitted by the Tariff Act of 1930.

Accord Said To Be Reached

At time of publication, chatter had arisen just minutes before stating that the accord had been reached.

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