1. Impact of Potential Free Trade Agreements on Sugar Prices P. Lynn Kennedy

2. Potential Free Trade Agreements Central American Free Trade Agreement (CAFTA) Central American Free Trade Agreement (CAFTA) Free Trade Area of the Americas (FTAA) Free Trade Area of the Americas (FTAA) South African Customs Union (SACU) South African Customs Union (SACU) Australia Australia Thailand Thailand

3. CountryProductionExports U.S. TRQ Allocation Mexico5,135,000182,0007,258 Canada50,00014,000--- Caribbean 1 Barbados47,00041,0007,371 Dominican Republic465,000185,000185,335 Haiti10,00007,258 Jamaica175,000138,00011,583 St. Kitts & Nevis24,00018,0007,258 Trinidad & Tobago102,00068,0007,371 Central America Costa Rica385,000155,00015,796 El Salvador476,000255,00027,379 Guatemala1,821,0001,327,00050,546 Honduras332,00078,00010,530 Nicaragua361,000179,00022,114 Belize120,000102,00011,583 Panama165,00055,00030,538 North & Central America Total 2 9,668,0002,797,000401,920 1 Excludes Cuba. 2 Excludes United States. Data Source: USDA/FAS, May 2003

4. CountryProductionExports U.S. TRQ Allocation -Metric Tons- North & Cent. America Total9,668,0002,797,000401,920 South America Total28,642,00014,571,000313,579 South Africa2,709,0001,395,00024,221 Swaziland542,000516,00016,850 SACU Total3,251,0001,911,00041,071 Australia4,971,0003,913,00087,402 Thailand6,030,0004,085,00014,743 FTA Total % of U.S. TRQ 52,562,00027,277,000858,715 76.9%

5. Additional U.S. Sugar Imports Estimated World Refined Sugar Price Percent Change Estimated U.S. Wholesale Refined Sugar Price Percent Change (MT)($ / MT)(¢ / lb)(%)($ / MT)(¢ / lb)(%) 0 25,000 50,000 75,000 100,000 150,000 200,000 300,000 400,000 500,000 750,000 1,000,000 1,500,000 2,000,000 3,000,000 216.21 216.27 216.32 216.38 216.43 216.53 216.64 216.88 217.10 217.31 217.87 218.42 219.53 220.67 222.94 9.81 9.82 9.83 9.84 9.85 9.86 9.89 9.91 9.96 10.01 10.11 - 0.03 0.05 0.08 0.10 0.15 0.20 0.31 0.41 0.51 0.77 1.02 1.54 2.06 2.97 594.58 589.82 585.12 580.43 575.73 566.81 557.71 539.94 522.87 506.10 466.68 429.82 364.50 307.74 218.07 26.97 26.75 26.55 26.33 26.11 25.71 25.30 24.49 23.72 22.96 21.17 19.50 16.53 13.96 9.89 - -0.80 -1.59 -2.38 -3.17 -4.67 -6.20 -9.19 -12.06 -14.88 -21.51 -27.71 -38.70 -48.24 -63.32

6. Additional U.S. Sugar Imports Estimated World Raw Sugar Price 1 Percent Change Estimated U.S. Raw Sugar Price 2 Percent Change (MT)($ / MT)(¢ / lb)(%)($ / MT)(¢ / lb)(%) 0 25,000 50,000 75,000 100,000 150,000 200,000 300,000 400,000 500,000 750,000 1,000,000 1,500,000 2,000,000 3,000,000 169.72 169.77 169.81 169.86 169.90 169.98 170.06 170.25 170.42 170.59 171.03 171.46 172.33 173.23 174.77 7.70 7.71 7.72 7.73 7.74 7.76 7.78 7.82 7.86 7.93 - 0.03 0.05 0.08 0.10 0.15 0.20 0.31 0.41 0.51 0.77 1.02 1.54 2.06 2.97 505.39 501.35 497.35 493.37 489.37 481.79 474.05 458.95 444.44 430.19 396.68 365.35 309.83 261.58 185.36 22.92 22.74 22.56 22.38 22.20 21.85 21.50 20.82 20.16 19.51 17.99 16.57 14.05 11.87 8.41 - -0.80 -1.59 -2.38 -3.17 -4.67 -6.20 -9.19 -12.06 -14.88 -21.51 -27.71 -38.70 -48.24 -63.32 1 World raw sugar prices estimated at 78.5 % of world refined prices (1998-2002 average). 2 U.S. raw sugar prices estimated at 85.0% of U.S wholesale refined prices (1998-2002 average). Source: Sugar and Sweetener Situation and Outlook Yearbook, USDA, June 2003.

7. Implications Domestic Producers Domestic Producers Domestic Consumers Domestic Consumers Government Government Rest of World Rest of World