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A tale of 2 cargo s …..

From Deficit to Surplus: Managing the shift in the NAFTA sugar balance John Cropley, ED&F Man New Orleans. A tale of 2 cargo s …. October 2013: 33k tonnes Australia- USA West coast . December 2013: 27k tonnes Mexico West coast - Australia . US Tariff Rate Quota for Sugar Imports.

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A tale of 2 cargo s …..

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  1. From Deficit to Surplus:Managing the shift in the NAFTA sugar balanceJohn Cropley, ED&F Man New Orleans

  2. A tale of 2 cargos….. October 2013: 33k tonnes Australia- USA West coast December 2013: 27k tonnes Mexico West coast - Australia

  3. US Tariff Rate Quota for Sugar Imports

  4. More than enough….

  5. How did we get here….?

  6. USA: Raw and Refined Sugar Prices

  7. Refined Sugar Prices: USA and World

  8. Mexico’s sugar production

  9. A massive (+40%) increase in cane sugar production Where have we seen this before……?

  10. Contrasting two “jumpers”….

  11. Mexico’s overall balance

  12. Since the last Farm Bill: Developments in Mexico

  13. (Notun-anticipated…..)

  14. Managing the shift in the balance Reactive? Proactive?

  15. Managing the shift in the balance; • Discourage imports: Let the market do the work (price)

  16. Managing the shift in the balance; • Discourage imports: Government action Re-export credit swaps Timing (delay in impact on balance) CQE swaps ?Cannot limit CQE origins

  17. Managing the shift in the balance; • Encourage consumption Non-food uses Feedstock Flexibility Program Declining corn price Uncertain RFS/ethanol demand Feed Use Declining corn price Experience from the EU…..

  18. Managing the shift in the balance; • Encourage consumption Non-food uses Feedstock Flexibility Program Declining corn price Uncertain RFS/ethanol demand Feed Use Declining corn price Experience from the EU…..industrial use of OOQ sugar

  19. Managing the shift in the balance; • Discourage production Marketing Allotments/OAQ already in place Payment in Kind (PIK)….an option?

  20. Managing the shift in the balance; • An integrated market….. ……implies shared responsibilities ….and requires and integrated approach to managing the balance? Both for equity AND efficiency

  21. A victim of success? December 2013: 27k tonnes Mexico West coast - Australia

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