The U.S. Department of Agriculture yesterday increased the raw sugar tariff-rate quota (TRQ) by 120,000 tons for fiscal year 2011. USDA expects the increase to yield a stocks-to-use ratio of 15 percent by September 30, which it hopes will mitigate some of the summer sugar-supply risk associated with late sugar beet plantings, uncertain Mexican imports and a tight world sugar market.
"We're encouraged that USDA recognizes the tight domestic supplies that our manufacturers are facing," said Clay Hough, IDFA senior group vice president. "We will continue to encourage government officials to increase the raw sugar TRQ by more tonnage to address the supply crunch and price spike U.S. sugar users currently face."
USDA has authority under the 2008 Farm Bill to increase sugar TRQs if adequate supplies are not available at reasonable prices. IDFA has worked consistently with the Sweetener Users Association to advocate for increasing the sugar TRQ, specifically for high-quality refined sugar used in dairy processing. The TRQ establishes the amounts of raw, refined and specialty sugars that may be imported for domestic use, which includes the processing of flavored milk and ice cream.
USDA also increased the overall allotment quantity (OAQ) for domestic sugar marketing by 164,750 tons to provide U.S. producers with the minimum market share of 85 percent. The OAQ determines the amount of sugar beet and sugar cane that domestic producers are allowed to market.
USDA said additional adjustments to TRQs and domestic marketing allotments may be needed later this fiscal year to ensure an adequate sugar supply for the domestic market and to prevent market disruptions.