Arguing that the suspension of the agreement between El Salvador and the Asian country was done in an "abrupt and unconsultated" way, businessmen of the Salvadoran sugar sector presented an appeal of unconstitutionality.
The lawsuit was filed on February 20, after the administration Sanchez Ceren finalized the trade agreement with the Asian country in December last year, a decision that was not consulted with the country's productive sector and will affect sugar exports, as they will no longer have preferential treatment.
Preparations are being made for the first export in the next few weeks of 50,000 tons of sugar, after the Asian country gave El Salvador approval for an import quota in December.
This shipment to China represents more than 10% of the production of exportable sugar in the country, as currently 60% of domestic production is exported and 40% is for local consumption, which has not changed its demand in recent years .
After the withdrawal of the reservation lodged by El Salvador against China with the World Trade Organization, China has lowered tariffs and opened an import quota for sugar from the Central American country.
China currently consumes about 12 million tons of sugar, representing 15% of total sugar that moves around the world. With the reduction in tariffs, the Salvadoran sugar industry will be able to direct its gaze to this market.
During the 2013-14 harvest ending on October 31 490,000 metric tons of sugar were exported while in the previous harvest the amount was 412,000 MT.
According to the Sugar Association of El Salvador , the main destinations of the country's raw sugar are the USA, Chile, Russia, Taiwan and Canada. Meanwhile, the refined product is sold to the Netherlands, Chile, Taiwan and other Caribbean countries .
The sector, which was ready to export 10,000 tonnes of sugar to the European Union, must wait two more months to do so.
Non-acceptance by dairy farmers in El Salvador and Costa Rica of the geographical indicators for Italian cheeses has caused a delay of at least 60 days of the entry into force of the Association Agreement with the EU.
"We were ready to export, but if there is no treaty we will have to send the sugar to another market at a lower price than would have been paid by the Europe" said Julio Arroyo, CEO of the Sugar Association of El Salvador.