Back in the days of polyester 1970's, the markets for Sugar and Silver were cornered, much as was oil embargoed, and predictably, their priced soared. It was a strange time. People were buying up Silver before the price moved up, sugar became scarce with large empty spaces on the grocery shelves and it doubled in price, then doubled again. Soft drink bottlers were forced to find an alternative in high fructose corn syrup and sugar miraculously became available again (at the higher price).All this time sugar and corn were subsidized. They just hadn't been subsidized enough. They still are. Corn is subsidized now by regulation to be distilled into ethanol in some states to give poorer gas mileage and ruin the seals in fuel pumps.
Anyway, sugar has been subsidized by governments, in various ways, for centuries. Queen Elizabeth I loved it so much she turned her teeth black. Help to keep her the Virgin Queen, no doubt.
Since the sugar panic of the 1970's, sugar price have been held artificially high in the U.S. through continuous agriculture subsidies. The USSR kept the Cuban Sugar crops afloat until 1991, when the USSR couldn't keep itself afloat. Sugar prices my be in for another price adjustment, should Obama "normalize" some trade with Cuba.
I recall in the late 1980's, I was phoned by a commodities trader who was trying sell me Sugar Futures.
At the time, to me, sugar had about the most artificial price in the national and world markets of any crop commodity, so I told him so. This trader became quite indignant with me and ask me "how dare I question his 'expert' advise." Fine, I said, keep cold-calling sugar, but it won't stay sweet. m/r
When Trade Rhetoric Shifts Trade Reality | The American Spectator
– 3.17.16
Not all is sweet in the heavily subsidized global sugar trade this U.S. election year.
With major U.S. trade initiatives working their way between the legislative and executive branches, the future of U.S. trade policy has taken center stage in the 2016 presidential contests. As candidates make their way through the various primaries in both manufacturing and agricultural states, each is outlining their plans for how they might make better deals for the United States. Even better, none of this is done in a vacuum. Markets watch politics, and global markets watch U.S. politics especially.
So when candidates for President of the United States start talking tough on trade, one can be sure that other nations are watching what is said closely — and reacting accordingly.
Such is the case in the latest battle in the global sugar trade. Two of the biggest players in the business, Brazil and Thailand, are going head-to-head before the World Trade Organization. The issue, as one can imagine, is subsidies, with Brazil accusing Thailand of massive subsidization of its sugar firms. This is ironic, of course, since Brazil is well known to be massively subsidizing its sugar industry — as well as trying to gain competitive advantage in trade through systematic devaluation of its currency (another issue raised in this year’s U.S. presidential race — how the U.S. ought to respond to currency devaluation by other nations).
-go to link-
So when candidates for President of the United States start talking tough on trade, one can be sure that other nations are watching what is said closely — and reacting accordingly.
Such is the case in the latest battle in the global sugar trade. Two of the biggest players in the business, Brazil and Thailand, are going head-to-head before the World Trade Organization. The issue, as one can imagine, is subsidies, with Brazil accusing Thailand of massive subsidization of its sugar firms. This is ironic, of course, since Brazil is well known to be massively subsidizing its sugar industry — as well as trying to gain competitive advantage in trade through systematic devaluation of its currency (another issue raised in this year’s U.S. presidential race — how the U.S. ought to respond to currency devaluation by other nations).
-go to link-
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