U.S. Sugar Refiners Ask to Reopen Suspended AD/CVD Investigations on Mexican Sugar

Two U.S. sugar refiners are asking the International Trade Commission and the Commerce Department to reopen the antidumping and countervailing duty investigations on sugar from Mexico (A-201-845/C-201-846). Imperial Sugar Company and AmCane Sugar, both “destination refiners” that import raw sugar for refining, filed requests over the past month with both agencies. According to John Magnus of TradeWins, who represents AmCane, the two companies are unhappy with price and quantity limits in the suspension agreements that cut their operating margins and make it difficult to import raw materials.

Unlike the domestic coalition that requested the AD/CVD investigations on sugar from Mexico, which are mostly growers and “integrated refiners” that refine sugar they grow themselves, destination refiners like Imperial and AmCane rely on sugar imports. The agreements that suspended the investigations on sugar from Mexico, agreed in December (see 1412240020), set minimum prices on raw sugar that will drive up prices for the raw sugar needed for refining and compress refiners’ margins, said Magnus. The agreement also limits the amount of raw sugar Mexican sugar exporters will likely send to the U.S., putting destination refineries on a “starvation diet,” while still allowing Mexican companies to export a considerable amount of competing refined sugar, he said.

Faced with suspension agreements that squeeze them on both sides, AmCane and Imperial filed on Jan. 8 requests that the ITC review the suspension agreements to ensure they meet the legal requirement to eliminate injury. AmCane and Imperial argue the agreements don’t. They followed that up with requests filed on Jan. 16 with the Commerce Department to continue the AD/CVD investigations on Mexico and issue final determinations. If the ITC review finds the agreements don’t eliminate injury, then they will be revoked and the investigations will proceed as normal. On the other hand, if the ITC approves the suspension agreements, the ITC and Commerce will still issue final determinations, creating the possibility that either could issue a negative determination and end the investigations without any duties imposed.

Rather than reach that point, sugar companies and the U.S. and Mexican governments could reopen negotiations and amend the suspension agreements to address the destination refiners’ concerns, said Magnus. “Ultimately, it should not be necessary for any of these additional agency decisions to actually be issued,” he said. “What really should happen is someone who has convening authority should summon everybody back to the table.”

However, Mexican exporters and the domestic companies that requested the investigation both say that Commerce and the ITC shouldn’t reexamine the suspension agreement or reopen the investigations at all. They say that only companies that participated in the investigation can request a review of a suspension agreement or ask for the investigations to continue. Imperial and AmCane participated in the creation of the suspension agreement, but that was a separate proceeding, and not a part of the investigation itself, said the Mexican Sugar Chamber and the American Sugar Coalition in comments in opposition to AmCane and Imperial’s requests with the ITC and Commerce, respectively.