U.S.D.A. reassigns 325,000 tons of sugar to imports

by Ron Sterk
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WASHINGTON D.C. — The U.S. Department of Agriculture said today it raised the 2010-11 (fiscal year 2011) raw sugar tariff-rate quota (T.R.Q.) by 325,000 short tons, raw value, as the result of reassigning unused domestic raw sugar allocations, effective with an April 12, 2011, Federal Register notice. The U.S.D.A. also said it was reassigning surplus beet sugar marketing allocations for 2010-11, but not changing the overall allotment quantity (O.A.Q).

The 325,000 ton T.R.Q. increase is expected to yield a net increase in imports of 260,000 tons due to normal T.R.Q. slippage, the U.S.D.A. said. The net quantity was expected to offset domestic raw sugar production losses as estimated by Florida processors because of the January 2011 freezes, the U.S.D.A. said.

“This increase in raw sugar imports, plus the net sugar estimated to be imported through the T.R.Q. reallocation, is expected to yield an ending F.Y. 2011 stocks-to-use ratio of 13.5% and provide a F.Y. 2011 sugar supply that reduces the need for imports under the unrestricted high-tier tariff,” the U.S.D.A. said.

In its April 8 World Agricultural Supply and Demand Estimates, the U.S.D.A. projected the year-end stocks-to-use ratio at 10.4%, compared with 13.3% last year.

“U.S.D.A.’s Commodity Credit Corp. (C.C.C.) determined that all sugar cane processors have surplus allocations of the fiscal year 2011 cane sugar marketing allotment,” the U.S.D.A. said. “Therefore, with the 325,000-ton reassignment to the raw sugar T.R.Q. increase, all sugar cane states’ sugar marketing allotments are reduced, with the total cane sector allotment decreased from 4,215,892 to 3,890,892 tons. The F.Y. 2011 sugar marketing allotment program will not prevent any domestic sugarcane processors from marketing all of their F.Y. 2011 sugar supply.”

The new raw cane sugar allotments were 1,856,850 tons for Florida (down 237,832 tons), 1,577,810 tons for Louisiana (down 42,662 tons), 173,016 tons for Texas (down 9,078 tons) and 283,216 tons for Hawaii (down 35,428 tons).

The Office of the U.S. Trade Representative will announce country allocations of the T.R.Q. increase and will reallocate shortfalls of the fiscal 2011 T.R.Q., the U.S.D.A. said.

After evaluating domestic beet sugar processors’ current inventories, estimated production, expected marketings and other factors, the U.S.D.A. said the C.C.C. was transferring allocations from beet processors with surplus allocation (not enough sugar to fill allocation) to those with deficit allocation (more sugar than originally allocated to sell).

“Due to uncertainties that still exist in forecasting beet processors’ F.Y. 2011 sugar production, no beet sugar allotment is reassigned to imports at this time,” the U.S.D.A. said. “Due to uncertainties that still exist in forecasting each company’s and sector’s F.Y. 2011 sugar production, further reassignments are likely.”

On Aug. 5, 2010, the U.S.D.A. set the 2010-11 T.R.Q. at the 1,231,497-ton World Trade Organization minimum. With the April 12 increase of 325,000 tons, the overall 2010-11 raw sugar T.R.Q. will be 1,556,497 tons. Raw sugar imports must be certified by Sept. 30, 2011.

The 2010-11 domestic beet sugar O.A.Q. remained at 5,019,358 tons as initially set prior to the start of the marketing year.

Today’s actions do not affect duty-free sugar exports from Mexico to the United States under the North American Free Trade Agreement, projected by the U.S.D.A. at 1,349,000 tons in 2010-11, and which some Mexican sugar industry groups forecast could exceed the 2008-09 record of 1,402,000 tons.

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