Asian sugar trade to rise as Japan, U.S. open markets

Asian sugar trade to rise as Japan, U.S. open markets

MANILA (Reuter): The liberalization of sugar trade in the United States and Japan by year 2010 will likely benefit producers from the Asia-Pacific region, the general manager of an Australia-based sugar marketing firm said yesterday.

"Australian, Thai, Malaysian, Indonesian and Chinese producers gain from increased sales and increased prices," Phil Atkins, general manager of CSR Ltd said.

Atkins and two other economists from Australia presented a study on the effects of sugar trade liberalization in the United States and Japan during the third day of the First Asia-Pacific Sugar Conference in Manila.

Based on the study, world raw sugar trade will likely increase by 14 percent if the United States and Japan will open fully their markets, he said.

Both Japan and the United States impose policies that keep domestic sugar prices high compared with world prices to protect their processors and growers.

"In tariff equivalent terms, protection in both countries exceeds 80 percent," Atkins said.

Efficient sugar exporters from Asia-Pacific like Thailand and Australia are likely to benefit from increased demand from Japan and the United States, he said.

"Australian producer revenue is projected to be 19 percent higher as a result of liberalization...This translates to A$300 million a year in increased profits to the industry, accruing each year following liberalization," Atkins said.

Revenues of Thai sugar producers are also expected to rise by 10 percent.

The liberalization of sugar trade in both Japan and the United States is a test of the Asia-Pacific Economic Cooperation (APEC), Atkins added.

"Policy makers in both countries know they must liberalize (sugar trade) as early as possible under APEC. Only that way are they likely to get recognition for providing leadership in APEC."

APEC groups the United States, Canada, China, Japan, Australia, Brunei, Chile, Hong Kong, Indonesia, Malaysia, Mexico, New Zealand, Papua New Guinea, the Philippines, Singapore, South Korea, Taiwan and Thailand.

The regional body aims to foster free trade among its members.