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USDA Increases Sugar Quota, Signals Further Increase Likely

Apr 25, 2012

The U.S. Department of Agriculture announced last week that it will increase the raw sugar tariff rate quota (TRQ), or amount of sugar imported without high tariffs, by 425,000 tons. This USDA action follows an April 10 request by representatives of sweetener-using industries, including IDFA, for quick action to increase sugar TRQs to assure adequate supplies of sugar at reasonable prices.

The additional sugar imports are well short of the over 950,000 tons requested to provide adequate stocks, and USDA acknowledged as much in its announcement, noting the TRQ increase will not be sufficient to attain reasonable endings stocks of 14.5 percent stocks-to-use ratio. USDA plans to reevaluate market conditions in June and will “increase, as determined appropriate, the TRQ to bring the expected FY 2012 ending-stocks-use to within the traditional range that USDA considers adequate, i.e., 13.5 to 15.5 percent.”

Reallocate Import Quotas

USDA also indicated it would work with the U.S. Trade Representative to reallocate import quotas from countries that are unable to fulfill their entire quota to countries that are able to ship enough sugar to make up the unfilled quota.

“IDFA thanks Acting Under Secretary Michael Scuse and USDA for these actions. This TRQ increase and quota reallocation are important for our sugar-using members because the current projected year-ending stocks are at 6.8 percent of total use, well under half of the 15.5 percent which historically has been needed to provide adequate sugar supplies,” said John Kelly, IDFA manager of international affairs. “USDA’s acknowledgement that additional TRQ increases will be needed and the announcement of a clear stocks-to-use target also are positive steps towards greater transparency in USDA’s administration of the sugar program.”

IDFA and other stakeholders have been working with Scuse, who is acting under secretary for Farm and Foreign Agricultural Services, to increase transparency and provide better market signals in the administration of the federal sugar program. IDFA opposes the current sugar program and has been working as a member of the Coalition for Sugar Reform to reform sugar policy in the upcoming Farm Bill.

For more information, contact Kelly at jkelly@idfa.org.

 
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