U.S.D.A. buys 91,238 tonnes of U.S. sugar

by Ron Sterk
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WASHINGTON — The U.S. Department of Agriculture on July 10 said it purchased a total of about 91,238 tonnes of beet and raw cane sugar at a cost of $43,835,033. The purchase was made to reduce the current domestic sugar surplus in the United States.

The total included 54,946.4 tonnes of raw cane and 36,291.3 tonnes of beet sugar. The purchased sugar was exchanged for a total of 264,704.6 tonnes of refined sugar re-export credits and 34,448 tonnes of Certificates of Quota Eligibility (C.Q.E.), at ratios ranging from 2.8 to 5.0.

A total of 163,680 tonnes of sugar had been offered for sale to the U.S.D.A., including 91,000 tonnes of raw cane and 72,680 tonnes of beet.

The U.S.D.A. on June 17 issued an invitation to buy up to 85,000 tonnes of domestic sugar to exchange for refined sugar re-export credits. The invitation was amended June 24 to include exchanges for C.Q.E.s.

It was the first purchase of sugar by the U.S.D.A. due to oversupply since 2000.

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By Steve Percifield 7/11/2013 9:28:29 AM
I am not a trader and woefully ignorant of the inner workings of the market. HOWEVER, philosophically, how can a government that is fiscally broke rationalize the spending of money they have to "print," in order to prop up the price of a commodity produced in relatively small quantities by a few politically-connected entities in the US? Our system was built on free market economics. Then our government steps in and undermines the market so that politicians can then complain that the market doesn't work. To me, it makes no sense. Perhaps someone can enlighten me.