Now Willie is going to explain that these artificially high prices are all that keep our sugar prices from rising!!
This thread is destined to soar to 20+ replies.
PROTECTIONISM BUMP!
Remember Monica and Bill Clinton? One of the people Bill talked to while Monica was doing her thing -- was a politically powerful, well-connected guy named Fanjul - a sugar producer.
Sugar pisses me off.
As a relative newcomer I must say that I love FR. Last week I got involved with a group of protectionist "anti-globalists" who promoted sugar price supports and accused me of treason for disagreeing.
I knew there must be someone who agreed with me and now this post.
I feel better.
I see the Cato Institute corporate shills are still misleading the public with myths about the "world sugar price".
Governments of all sugar-producing countries intervene in their production, consumption and/or trade of sugar, which makes sugar one of the most heavily subsidized and distorted markets in the world.
The so-called "world price" for sugar is essentially meaningless, reflecting a relatively small residual or "dump" market of highly subsidized sugar. Since 1985, this dump price has averaged only half the world average cost of producing sugar, and bears little, if any, relationship to actual global supply and demand conditions.
About 75 percent of the world's sugar production is not "traded" on the open market. Approximately 125 million metric tons of sugar are produced annually, and most of this–about 75 percent–is sold profitably in the country where it is grown and processed or it is sold at a profit under special arrangements to other countries. This allows the remaining 25 percent to be dumped below cost of production on what is commonly called the "world sugar market."
'World dump market' poses a serious threat to American consumers and producers. This so-called world market is a dumping ground for foreign sugar sellers. It is the most price-volatile of all commodity markets. In the recent past, prices have ranged from more than 60 cents a pound in 1974, and more than 40 cents a pound in 1980, to less than 3 cents a pound in 1985. Consumers are gouged as prices rise; farmers are hurt as prices plummet, threatening ,stable U.S. supplies. U.S. sugar policy works to keep supplies stable and prices reasonable.
It should be noted that elimination of subsidies will also eliminate surplus sugar production, and the so-called "word price" (the dumped surplus) will disappear. Just like OPEC oil, sugar prices would then increase dramaticly.
Mark