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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: Mark Adams who wrote (41762)	11/21/2003 1:44:49 AM
From: Mark Adams	Read Replies (1) of 74559

I erred re duties on Sugar and the potential impact on domestic Ethanol production. Apparently, the intended use of the sugar is considered in figuring the duty. I'm still left wondering why Brazil uses cane sugar to make ethanol, while the US relies mostly on Corn. I understand the byproduct credits, especially distiller grain left over(good animal feed) plays into this. It appears that Brazil does not have enough excess capacity to fully meet the intended doubling of US consumption. They certainly have a head start on the US in terms of domestic consumption, and some excess production. Brazil (Note: Thailand potential exporter too?) unica.com.br US Resources: ethanolrfa.org ncga.com mathproinc.com Stealing pennies from millions (Or: my exploitation of US consumer rant still stands!) The sugar program enacted in the 1996 farm bill still keeps the domestic price of sugar at a level about double the world price and in mid-1999 as much as four times the world level. The result has been to continue transferring wealth from consumers to a handful of wealthy sugarcane and sugar beet farmers .... According to GAO, Americans pay this hidden tax in the form of higher costs in their grocery stores and restaurants. This cost has been estimated at approximately $1.4 billion per year. .... Commodity ingredients like sugar account for only about a quarter of the cost of most processed foods and beverages. The rest is labor, transportation, utilities, and other cost elements. In some cases, a small decline in sugar prices may be offset by higher costs of other inputs. But between 1990 and 1994, when raw sugar prices declined 6%, retail sugar prices also declined--by 6%. In fact, there is a close relationship between the price of raw sugar and the retail price of refined sugar. If the sugar program is eliminated, a 15 cents per pound free market price would provide consumers with about a 7 cents per pound savings on refined sugar. This translates into a reduction of about 35 cents in the price of a 5-pound bag of sugar. That's an immediate, direct consumer savings of about $350 million on grocery sugar alone. sugar-reform.org

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