“If a bilateral agreement were negotiated, it would include additional market access for Mauritius special sugars”

The demand for special sugars is rising on the American market. However, exporting under the preferential regime of the global Tariff-Rate Quota (TRQ), Mauritius cannot export more than the imposed tons. Thus, for the CEO of the Mauritius Sugar Syndicate, this bilateral agreement that the Ministry of Industry, SMEs and Cooperatives is negotiating with the United States would be beneficial for special sugars while allowing Mauritius to increase its sales and strengthen its presence in this market.

S.K.

Mauritian sugars are exported to the American market. Under which preferential regime can Mauritian sugar access that market?

Raw sugar produced in Mauritius is exported to the U.S. market under the preferential regime of the global Tariff-Rate Quota (TRQ). Each year, within the framework of its commitments made at the level of the World Trade Organization (WTO), the United States is in fact obliged to import a minimum of 1.117 million metric tons raw value of raw cane sugar from “historical” suppliers. Mauritius, one of them, benefits from a quota share of 1.2%, which is equivalent to about 12,200 tons of sugar that can be exported to the United States duty-free.

What about special sugars? 

Special sugars are unrefined sugars for direct consumption targeted at niche market segments where consumers can appreciate their wholesome flavour and taste, and the nutritional content that they retain. Mauritius has been exporting such sugars to the United States for over forty years, with loyal clients who have been working with us since then. Through one of our customers, it is presently being distributed within the key coffee chains across the US. 

“Mauritius can export about 12,200 tons of sugar to the United States duty-free.”

Over the past ten years, exports of special sugars to the US market have increased considerably, and the annual TRQs allocated to Mauritius have been filled through supplies of these value-added sugars. Whenever additional TRQs are allocated/reallocated, we have even managed to export larger quantities, having exceeded 17,000 tons sales in 2022/23.

Even if special sugars are in high demand on the American market, you are not able to export more because of the Global Tariff-Rate Quota…

Indeed, we unfortunately cannot sell more, despite higher demand, because of the limit of this annual TRQ, unless there is a reallocation triggered by the USDA on an ad hoc basis whenever the US market is in short supply. 

That said, the United States remains a promising market for these sugars, and therefore, there is growth potential. Thus, if there are opportunities, or possibilities to increase this TRQ, it would certainly help the industry to enhance its exports to the United States.

It is also in this perspective that the Ministry of Industry, SMEs and Cooperatives is envisaging discussion of a bilateral agreement with the United States, especially if there is a risk that AGOA is not renewed or Mauritius is no longer eligible to benefit from same. 

The idea proposed is that, if such a bilateral agreement were to be negotiated, it would also include additional market access for Mauritius special sugars. Thus, in addition to the current quota of 12,200 tons, Mauritius could benefit from an additional duty-free TRQ every year for the export of these sugars. This would allow increased sales and strengthen Mauritius’s presence on the US market.

Does the future of the sugar sector lie in special sugars? 

The future of the sugar sector rests on value-addition and niche segments in export markets. Special sugars, as differentiated products, bring higher value and allow improvement of the average price, as well as the revenue per ton of sugar for millers and planters.

Even in the segment of white sugar, there are high-value products already being exploited, for example, extra-fine white sugar or Bottlers’ Grade sugar intended for bottlers.

“The future of the sugar sector rests on value-addition and niche segments in export markets.”

The central idea is therefore to move away from the status of a simple commodity and to position ourselves on markets where additional premiums can be obtained while ensuring customer loyalty. This would generate better remuneration and strengthen the competitiveness of the Mauritian sugar sector.

It is important to recall that the sugarcane sector, including bagasse and molasses, presently accounts for about 2% of the national gross domestic product.