U.S.D.A. acts to boost 2016-17 sugar supply

by Ron Sterk
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Actions should increase U.S. sugar supply by 414,000 tons.
 

WASHINGTON — The U.S. Department of Agriculture on July 24 announced four sugar program adjustments aimed at increasing the U.S. sugar supply by 414,000 short tons, raw value, to ensure an adequate supply of raw sugar in the United States for the remainder of the current marketing year that ends Sept. 30.

The U.S.D.A. increased the domestic sugar overall allotment quantity (O.A.Q.) by 187,000 short tons, raw value; reassigned 175,423 tons of beet sugar marketing allotments among U.S. beet processors; reassigned surplus domestic cane sugar marketing allotments of 870,000 tons to imports; and increased the U.S. raw sugar tariff rate quota (T.R.Q.) by 269,724 tons.

The 2016-17 O.A.Q., initially set at 10,268,000 short tons, raw value, was increased by 187,000 tons to 10,455,000 tons, which equals 85% of the 12,300,000 ton estimate of domestic human sugar consumption for the current year as published in the July World Agricultural Supply and Demand Estimates report. The U.S. sugar program requires the U.S.D.A. adjust the O.A.Q. based on quarterly estimates of sugar consumption to maintain the 85% level for domestic sugar. The program also requires 45.65% (4,772,708 tons) of the O.A.Q. be allocated to cane sugar and that 54.35% (5,682,293 tons) be allocated to beet sugar.

The reassignment of 175,423 tons of beet sugar marketing allocations from certain U.S. processors with inadequate supplies to other processors needing additional allocations eliminated surplus beet sugar allotment to reassign to raw cane sugar imports, the U.S.D.A. said.

The reassignment of 870,000 short tons, raw value, of the domestic cane sugar shortfall included: 28,932 tons to raw cane sugar imports from Mexico of less than 99.2 polarity; 75,000 tons to imports from Mexico of less than 99.5 polarity; 269,724 tons to an increase in the U.S. raw sugar T.R.Q.; and the remaining 496,344 tons to imports already expected.

The U.S.D.A. also requested the U.S. Department of Commerce to increase the 2016-17 (fiscal 2017) Mexico export limit, as determined under the U.S.-Mexico anti-dumping and countervailing duty suspension agreements, by 103,932 short tons, raw value, and asked the Office of the U.S. Trade Representative to reallocate the expected shortfall of 95,344 tons in the 2016-17 raw sugar T.R.Q.

The overall 2016-17 raw cane sugar T.R.Q., originally set in May 2016 at the 1,231,497-ton minimum committed to World Trade Organization agreements, now will be 1,501,221 tons. Sugar entering under the revised T.R.Q. will be allowed to enter the United States through Oct. 31, 2017, one month beyond the end of the fiscal year.

“Today’s 269,724 short ton, raw value, increase in the raw sugar T.R.Q., combined with the requested reallocation of the T.R.Q. shortfall by the U.S.T.R. and the requested increase in the export limit for Mexico by the Commerce Department, is expected to yield a net increase in raw sugar imports of 414,000 short tons, raw value, since some shortfalls are expected,” the U.S.D.A. said.
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