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Sugar makes up a large percentage, 20-30%, of raw material costs for two of the three main sugar containing product (SCP) sectors, chocolate confectionary and breakfast cereals, the third sector being non-chocolate confectionary. Also minding that the sugar price in the United States is 23.5 cents per pound while the world price is set at 10.9 cents; it is not uncommon for SCP manufacturers to be relocating abroad. The relocations of these manufacturers have been responsible for 6,400 job losses in the SCP industry of the total 10,000 losses since 2002. The high sugar prices in the United States are “maintained through support loans and tariff-rate quotas.” (pg. 3)
As reported by a large candy company labor only accounts for 3 to 6% for making the candy while in sugar labor is accounted for 30 – 70%. It is not uncommon for businesses like this to buy sugar in Mexico where sugar prices stand at two thirds of the US prices, or in Canada where prices are less than half the US sugar price. With these statistics the SCP manufacturers favor relocating abroad, like Canada and Mexico, where labor and health care costs are cheaper, and hence decreased employment in the SCP industries. “Studies estimate that the U.S. sugar program maintains approximately 2,260 sugar harvesting and growing jobs” (pg. 11) which are mainly filled with seasonal workers. With that accounted for, it’s suggested that for “each one sugar growing and harvesting job saved through the high U.S. sugar prices, nearly three confectionary manufacturing jobs are lost.” (pg. 2)
Though employment in SCP industries has decreased there has been an increase in domestic production. While SCP production “accounts f ...