CHANGES IN THE U.S. DEMAND FOR SUGAR AND IMPLICATIONS FOR IMPORT POLICIES

The thrust of this paper is to identify and measure structural changes in the U.S. demand for sugar and to derive subsequent implications for import restriction policies. Empirical results indicate that changes in consumer preferences and the availability of closer and cheaper sweeteners in food processing, especially high fructose corn syrup (HFCS), are exerting a downward pressure on sugar demand. As the U.S. demand for sugar decreases and the food industry adjusts faster to sweetener choices, the U.S. government would have to impose more restrictive import barriers to maintain prices to domestic sugar and HFCS producers. Furthermore, the welfare impact of U.S. sugar policy options on domestic consumers and food processors will be lessened.