823.61351/4–248
The Ambassador in Peru (Cooper) to the Secretary of State
No. 263
Sir: I have the honor to refer to the recent purchase by the Commodity Credit Corporation of 33,000 long tons of Peruvian sugar, and to the Department’s memorandum of conversation dated March 3, 19481 conveying remarks of the Ambassador of Peru in Washington on the subject of sugar.
As reported previously by the Embassy (A–756, December 19, 19471), the Sugar Act of 1948 evoked much critical comment in Peru concerning United States trade policy. In an effort to mitigate such criticism, which threatened to influence unfavorably our relations in Peru, the Embassy encouraged the projected United States purchase of Peruvian sugar for use in occupied areas, and on February 17 released to newspapers the announcement of the offer by the Commodity Credit Corporation (Department’s telegram No. 74, February 13, 19481 to purchase 33,000 long tons of raw sugar from Peru. This announcement received extensive and satisfactory publicity, along with favorable editorial comment. Representatives of the sugar industry and [Page 724] of the Peruvian Government since then have mentioned their appreciation of this aid toward providing a dollar market, and the newspapers have discontinued their former strong criticism regarding this aspect of United States commercial policy.
The exceptionally favorable reaction can be attributed partially to the public’s misapprehension that Peru was having difficulty in selling its sugar during 1948. This misapprehension was fostered by newspaper criticism of the Sugar Act and by complaints of the sugar industry following the drop last year in prices. Actually, the market situation for Peruvian sugar in 1948 has been consistently good, with dollar markets outside the United States readily available for the entire crop. In fact, the industry sold the 33,000 long tons of sugar to the Commodity Credit Corporation primarily to “save face” following its complaints against the lack of a United States sugar market. According to producers, this quantity was made available only by dropping negotiations for sale of the same sugar to European buyers at prices higher than the four cents per pound paid by the CCC.
The purchase by the CCC has improved our political as well as commercial relations with Peru, and has had a highly beneficial effect in curbing unfavorable newspaper comment respecting United States commercial policy. Very likely the subject will not receive much further public attention during the balance of 1948, although it will of course be important again when 1949 market prospects become dominant in the situation, especially when the United States announces import quotas for 1949.
Respectfully yours,
Agricultural Attaché