U.S. again delays preliminary decision on Mexico sugar trade pact

The U.S. government has again extended its deadline to issue preliminary results of a review of a 2014 sugar trade pact with Mexico, it said on Friday, as uncertainty over flows between the two countries continues to roil the market.

The Department of Commerce said in a notice it is extending its deadline by 2-1/2 weeks to Nov. 23 to issue its preliminary decision on a review of the agreements, which ended a trade battle with Mexico.

The extension will likely prolong the uncertainty that has gripped the North American market, as sugar companies and farmers on both sides of the border await the outcome of ongoing negotiations between the two sides.

The move was expected as materials required for the review continued to stream in, sources said. It comes within the same week that U.S. sugar companies, in a rare move, asked the trade deal be terminated.

The United States and Mexico agreed on a deal in late 2014 which suspended large duties on U.S. imports from its southern neighbor. The deal also established reference prices and a quota for imports, after a Commerce Department probe showed the domestic industry was being harmed by cheap, subsidized sugar.

The administrative review, which has already been postponed three times from an initial deadline of Sept. 1, was requested by interested parties, the Commerce Department said in the notice. U.S. sugar companies have asked the government terminate the agreements, saying they are being violated.

U.S. cane refiners including ASR Group, the maker of Domino Sugar, and Imperial Sugar, a subsidiary of commodities trading firm Louis Dreyfus Co [AKIRAU.UL], have pressed the government to rework the deal, saying that they are being starved of the raw sugar supplies needed to run their refineries and that crushing their margins.

Two parties on Monday requested the United States terminate the agreements, according to documents. The parties were the group of cane growers and ASR Group, which initially asked the government to open the investigation in 2014 as well as Imperial Sugar.


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