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Exclusive Mexico cancels sugar export permits to U.S. in trade dispute


´╗┐Mexico has canceled existing sugar export permits to the United States in a dispute over the pace of shipments, according to a letter seen by Reuters, in a flare-up industry sources said could temporarily disrupt supplies. The letter sent by Mexico's sugar chamber to mills on Monday partly blamed the situation on unfilled positions at the U.S. Department of Commerce, which it said had led to a "legalistic" interpretation of rules with no U.S. counterparts in place in Washington for Mexican officials to negotiate with. The cancellations marked the latest dispute of a years-long trade row between Mexico - the U.S.' top foreign supplier of sugar - and the United States at a time when cane refiners are struggling with prices and tight supplies, U.S. industry sources said. The letter, sent by Mexico's sugar chamber to mills on Monday, said existing permits would be reissued in April. The country's sugar mills are in full swing at the height of the harvest. The Mexican Economy Ministry said it could not immediately comment. Officials from Mexico's sugar chamber declined to comment. Mexico's sugar quota, set annually by a 2014 trade deal, was established at 820,000 tonnes in the current 2016-17 crop year. The U.S. sugar industry late last year pressed the Commerce Department to withdraw from a 2014 trade agreement that sets prices and quota for U.S. imports of Mexican sugar, unless the deal can be renegotiated. The development comes as ties between the United States and Mexico have frayed under President Donald Trump, who took office in January and is seeking to renegotiate the North American Free Trade agreement as he sees the trade deal skewed to favor Mexico.

For graphic on U.S. sugar from mexico, click tmsnrt.rs/2lBl83e'ABSURD' DISPUTE

U.S. sugar prices have soared since late last year when Washington said the 2014 deal that suspended large duties on sugar from Mexico after a trade investigation may not be working as intended. The U.S. domestic raw sugar contract on ICE Futures U.S. SFSc1 settled at 31.71 cents per lb on Tuesday, the highest in nearly five years. The license cancellation by Mexico adds to protracted marketplace uncertainty, said Richard Pasco, president of the Sweetener Users Association trade group."We need adequate supplies and the lack of resolution is a problem," he told Reuters in a phone interview on Tuesday.

The document made no suggestion that the present dispute was related to the wider politics, but described as "absurd" an interpretation by "low-level" U.S. Commerce Department officials of a clause in so-called suspension agreements. The dispute centers on an interpretation of how the Mexican government issues export licenses to ensure supplies enter the United States at a regulated pace. It was not immediately clear how many sugar export permits were canceled or what penalties Mexico had faced. The Economy Ministry decided to cancel the permits since it has no counterparts at the U.S. Department of Commerce to resolve the issue, the document said. Mill owners should consider legally challenging the decision, it said. Staff positions remain unfilled in several U.S. government departments, a situation Mexican officials say has made it difficult to negotiate trade issues. A spokesman for the U.S. Department of Commerce did not respond immediately to a request for comment.

Intels $15 billion purchase of Mobileye shakes up driverless car sector


´╗┐Intel Corp (INTC. O) agreed to buy Israeli autonomous vehicle technology firm Mobileye (MBLY. N) for $15.3 billion on Monday in a deal that could thrust the U.S. chipmaker into direct competition with rivals Nvidia Corp (NVDA. O) and Qualcomm Inc (QCOM. O) to develop driverless systems for global automakers. The pricey acquisition of Mobileye could propel the world's largest computer chipmaker into the front ranks of automotive suppliers at a time when Intel has been reaching for market beyond its core computer semiconductor business. It also promises to escalate the arms race among the world's carmakers and suppliers to acquire autonomous vehicle technology, and could fuel already-overheated valuations of self-driving start-ups. The stakes are enormous. Last year, Goldman Sachs projected the market for advanced driver assistance systems and autonomous vehicles would grow from about $3 billion in 2015 to $96 billion in 2025 and $290 billion in 2035. Skeptics have questioned whether auto companies and suppliers will be able to deploy fully self-driving cars safely in the next four years, as several have promised. Investment analysts on Monday raised concerns about the potential synergies between Intel and Mobileye, as well as the acquisition's price. Intel has not been a significant player in the sector, although it has invested in at least half a dozen start-up companies developing different components for self-driving systems, from robotics to sensors. Mobileye brings a broad portfolio that includes cameras, sensor chips, in-car networking, roadway mapping, machine learning, cloud software and data fusion and management."This is a tremendous opportunity for them to get into a market that has significant growth opportunities," said Betsy Van Hees, an analyst at Loop Capital Markets. "Mobileye's technology is very critical... The price seems fair," she added. Still, the industry newsletter Semiconductor Advisors on Monday wrote that Intel's acquisition of Mobileye indicates a strategic move "very far outside its core business franchise." The price is about 21 times expected 2017 revenue, making it more than six times more expensive than the semiconductor industry's three-year deal average, said B. Riley analyst Craig Ellis. He said the "very expensive transaction" improved Intel's position in the automated driver assistance market, but left Nvidia the leader on the highest end.

Intel is paying a premium of 60 times Mobileye's earnings, about four times the premium that Qualcomm is paying to acquire the Netherlands' NXP. The $63.54-per-share cash deal represents a premium of about 33 percent to Mobileye's closing price of $47 on Friday, but below its all-time high closing price of $64.14 in August 2015. Mobileye's shares rose 28.2 percent to close at $60.62, while Intel's shares were down 2.1 percent. The market for self-driving technology is becoming crowded, including mapping company Here, as well as technology companies ranging from Alphabet Inc's Waymo (GOOGL. O) to Chinese Internet giant Baidu Inc (BIDU. O). Shares of systems integrator Delphi Automotive PLC (DLPH. N), which has partnerships with Intel and Mobileye, rose 4.0 percent. Delphi said in a statement that it expected the deal would let it accelerate adoption of new technologies.

MERGING 'EYES' AND 'BRAIN' Intel has a mixed record of capitalizing on technology outside computer chips. Last year it spun out its cyber security division, formerly known as McAfee, in a deal valuing it at $4.2 billion including debt, five years after having bought McAfee for $7.7 billion. Intel will give Mobileye unusual autonomy, integrating its own automated driving group with Mobileye's operations under Mobileye Chairman Amnon Shashua, who will lead the unit from Israel. Intel Chief Executive Brian Krzanich said the acquisition was akin to merging the "eyes of the autonomous car with the intelligent brain that actually drives the car."Mobileye supplies integrated cameras, chips and software for driver-assist systems - the building blocks for self-driving cars - to more than two dozen vehicle manufacturers.

In an interview in January, Shashua told Reuters: "If you want to build a truly autonomous car, this is a task for more than one player... The idea is to have a number of partners to share resources and data."Mobileye was an early supplier of vision systems to Tesla, but the two companies had an acrimonious and public break-up last summer after the driver of a Tesla Model S was killed while operating the vehicle using Tesla's Autopilot system. Mobileye, founded in 1999, accounts for 70 percent of the global market for driver-assistance and anti-collision systems. It employs 660 people and had adjusted net income of $173.3 million last year. Shashua and two other senior Mobileye executives stand to do well by the deal: together they own nearly 7 percent of the company. Shmuel Harlap, Israel's biggest car importer and one of Mobileye's earliest investors, also holds a 7 percent stake. BATTLE FOR SELF-CONTROL Mobileye and Intel are already collaborating with German automaker BMW