Costa Rican businessmen complain that because of export subsidies granted to sugar producers in India, there has been an artificial increase in production, causing prices to fall below costs.
Édgar Herrera, executive director of the Industrial Agricultural League of Sugarcane (Laica), explained to Elobservador.cr that "... These subsidies are greater than those allowed by the World Trade Organization, in the order of $10 billion annually.
Both countries agreed to increase from 60,000 to 125,000 tons the export quota of Guatemalan sugar that enters the Asian nation free of tariffs.
In the framework of the Second Meeting of the Administrative Commission of the Free Trade Agreement between Guatemala and the Republic of Taiwan, held in Taipei, Taiwan on July 8 and 9, both parties agreed to eliminate tariffs for the entry of certain products, informed the Ministry of Economy of Guatemala.
The Constitutional Chamber of El Salvador declared the demand of the sugar manufacturers inadmissible, arguing that there is no link between the cancellation of the FTA with Taiwan and the application of constitutional norms.
After the Salvadoran government decided to finalize the trade agreement with the Asian country in December last year, an act that was not consulted with the country's productive sector, the guild presented in February this year an appeal of unconstitutionality.
Because of the decline in the international price of sugar in recent years, agricultural businessmen in Guatemala have decided to migrate to more profitable crops, such as bananas and African palm.
Last year, Guatemalan banana exports totaled $815 million, 4% more than the $782 million reported in 2017, a rise that is partly caused by the increase in the cultivated area in the country.
From January to September of this year, foreign sales totaled $531 million, resulting in a 5% increase over the same period in 2017, mainly explained by banana and sugar sales.
The most recent figures of the General Comptroller of the Republic detail that between the first nine months of 2017 and the same period of 2018 exports rose from $506 million to $531 million, an increase partly explained by the behavior of banana and sugar sales.
The downward trend in international prices and the climate impact are part of the challenges facing producers in the region for the next harvest.
According to data from CentralAmericaData, the average price per kilo of sugar exported by countries in the region fell 38% between May 2012 and June 2017, from $1.13 to $0.70.
In 2017 exports totaled $5,760 million, 6% more than in 2017, and sales of clothing and sugar were the ones that accounted for most of the increase.
Sales in the Central American region, including Panama, constituted the second largest destination for Salvadoran exports, amounting to $2.403 billion, also registering an increase of 6% compared to 2016.
The new trade agreement increases the export quota of sugar to 60 thousand tons, and eliminates the export tariff of bovine offal to the Asian island.
Laprensa.com.ni explains that "...The expansion was agreed at a meeting between the delegations of the two diplomatic allies, headed by the general director of the BOFT, Yang Jenni, on the Taiwanese side, and his Nicaraguan counterpart, Cristian Martinez, held on Thursday."
The guild foresees closing the 2017/18 cycle with a production of more than 17 million hundredweight of sugar, which would represent a 10% increase compared to the previous cycle.
If expectations by employers in the sugar guild are met, production from the 2017/18 cycle would be the best achieved yet.Favorable climate conditions and the expected expansion of sowing areas, from 105 thousand to 109 thousand manzanas, are the reasons for the guild's expectations for the cycle that begins next month.
The Asian country increased duty free sugar import quotas from 60 thousand to 80 thousand metric tons, and granted an additional quota to import a thousand kilos of dry fruit.
From a statement issued by the Embassy of Taiwan in El Salvador:
The Second Administrative Meeting of the Free Trade Agreement between Taiwan and El Salvador was held in Taipei, Taiwan, under the efforts of both countries, closing the round of meetings with much success and achievement for both countries who took a step forward in strengthening bilateral trade.
In the last five years, exports to the Asian country grew by 22%, led by products such as sugar, confectionery, coffee, tea and spices.
With the aim of creating a better investment climate between both countries and increasing the possibilities of exporting Guatemalan goods and services, the exporters' association signed an agreement with the Central American Trade Office of Taiwan to develop new businesses based on three aspects: Technical cooperation, trade promotion and exchange of information between the two institutions.
In the first four months, sales abroad totaled $1.854 billion, led by garments and textiles, sugar, machinery, electrical and plastic materials.
From a report by the Central Bank:
Salvadoran exports to the rest of the world amounted to US $1.8534 billion as of April 2017, increasing by US $66.9 million (3.7% more) compared to the same month in the previous year, the Central Reserve Bank reported.Among the sectors that increased their sales abroad is the agricultural sector, which grew by 5% and the manufacturing industry (3.7% more), with a significant participation of products such as sugar and clothing, which together contributed US $97.5 million during this period.
In the first four months of the year the volume exported was 256 million kilos, 84% more than in the same period in 2016.
Growth in the cultivated area and productivity improvements explain the better performance of the sugar industry in Nicaragua.In the first quarter of the year, not only did the exported volume go up, but so did exported value, going from $50 million generated in the same period in 2016 to $118 million this year.
In the first quarter of the year exports of coffee, beef and sugar cane generated $388 million, 54% more than in the same period in 2016.
Between January and March this year 45 million kilos ofgreen coffeewere exported,generating revenues of $159 million, which is 35% greater than the value of exports in the first quarter of 2016.
With a lawsuit against the Ministry of Foreign Trade in Costa Rica the virtually monopolistic Liga Agrícola Industrial de la Caña de Azúcar is attempting to limit the quotas for historical importers of the grain.
The administrative proceedings presented by Liga Agrícola Industrial de la Caña de Azúcar (LAICA) against the Ministry of Foreign Trade (COMEX), aim to limit the quotas for historic imports of sugar, and could have consequences for other mass consumption products in the country.