WASHINGTON — The U.S. Department of Agriculture on July 10 increased the 2007-08 Overall Allotment Quantity (O.A.Q.) by 500,000 tons, raw value, "in response to a tightening domestic refined sugar market."
"U.S.D.A. expects this action to effectively eliminate marketing allotment program restrictions on domestic sugar beet and sugar cane processors and increase the 2007 crop year marketable sugar supply by 100,000 to 200,000 tons," the department said.
The U.S.D.A. raised the O.A.Q., the amount of sugar domestic processors may sell without penalty, for marketing year 2007-08 (ending Sept. 30, 2008) to 8,950,000 tons from 8,450,000 tons initially set last year. Of the total 500,000-ton increase, beet sugar allocations were raised 271,750 tons, to a new level of 4,864,325 tons, and cane sugar was raised 228,250 tons, to 3,626,533 tons.
Because cane sugar producers are unable to deliver the increased amount, their share, 228,250 tons, was reassigned to imports, specifically to Mexico, the U.S.D.A. said. With 230,892 tons previously reassigned to imports, a total of 459,142 tons now has been reassigned.
"Such imports are already anticipated, however, and therefore no increase to U.S. sugar supply from this reassignment is expected," the U.S.D.A. said.
"The domestic refined sugar market has tightened considerably in recent months," the U.S.D.A. said. "Refined sugar supplies have been severely reduced by the tragic explosion at a major sugar refinery and by lower 2008 sugar beet acreage due to high grain prices and poor planting conditions. In addition, domestic deliveries of sugar for food use are projected to increase by 3% in fiscal year 2008."
The sugar trade had anticipated an increase in the O.A.Q. for the past couple of weeks.