Press Releases

FOR IMMEDIATE RELEASE                                              CONTACT:   Phillip Hayes

Friday, June 11, 2010                                                                          202-507-8303

Sugar Producers, Food Manufacturers Team Up to Suggest Early TRQ Announcement

WASHINGTON—In a show of unity, U.S. sugar producers and industrial sugar users today delivered a joint recommendation to the U.S. Department of Agriculture  (USDA) to shore up sugar supplies this fall.

The recommendation, which came in the form of a letter from the Sweeteners and Sweetener Products Agricultural Technical Advisory Committee, suggested that the USDA expedite its announcement of the FY2011 Tariff Rate Quota, which would provide access to the U.S. market for no less than 1.256 million short tons of raw and refined sugar from 40 countries.

An early announcement would enable foreign suppliers to begin preparing shipments that may be needed to maintain strong sugar refinery output before domestic sugar harvest ramps up and significant inventories are built in November and December.

“We have always told sugar users and USDA officials that we would alert them to tightening supplies so our customers can continue normal operations,” explained American Sugar Alliance Chairman James Johnson. “An early TRQ announcement can head off possible problems before they occur.”

Late summer is usually the earliest the USDA announces foreign quota amounts for the fiscal year.  Overseas suppliers then prepare shipments and transport raw sugar to the United States, a process than can take weeks.  An early announcement would speed the process so the raw sugar can begin arriving as soon as October 1.

Johnson expects domestic supplies will strengthen as domestic sugarcane and sugarbeet harvests get underway in the fall.  

The market seems to agree with Johnson’s prediction.  Publicly reported prices for delivery of both raw and refined sugar in November and beyond are sharply lower than current prices.  

Wholesale refined sugar prices averaged 48 cents and 45 cents per pound in April and May respectively, according to USDA data, but asking prices for sugar delivered after October have fallen by as much as 10 cents per pound.

The short-term futures contract for raw sugar delivered in November is 28 cents per pound, which is down from current trading prices of 32.5 cents.

-0- 
For more information about sugar policy or for a copy of the joint letter, visit www.sugaralliance.org.

June 11, 2010

The Honorable James Miller

Under Secretary for Farm and Foreign Agricultural Services

U.S. Department of Agriculture

14^th Street and Independence Avenue, S.W.

Washington, D.C. 20250

Dear Mr. Secretary:

As you know, the Food, Conservation and Energy Act of 2008 requires that the annual tariff rate quotas for raw sugar initially be set at the WTO minimum level of 1,117,195 metric tons, raw value.  The Agricultural Trade Advisory Committee for Sweeteners, representing both sugar producers and users, recommends that you announce the raw sugar TRQ for the 2010/11 fiscal year as early as possible.  The Committee discussed this issue at its May 6 meeting and noted the following benefits of an early announcement of the raw sugar import quota:

• It would enable the U.S. Trade Representative to allocate the country quotas and allow the appropriate authorities in the exporting countries to allocate their Certificates of Quota Eligibility to their sugar producing and exporting entities in a timely manner.  Many do not allocate until after the official U.S. announcement, even when the country allocations are entirely predictable, as they are this year.
• This would enable U.S. cane sugar refiners to contract for whatever imported sugar they need for the fall quarter in a measured and deliberate fashion.

Since the total TRQs are known and the country allocations are by formula, we could see no disadvantages in an early announcement of the 2010/11 quotas.

Thank you for considering our recommendation.

Sincerely yours,

Don Phillips

Co-Chair, Sweeteners ATAC

Pat Henneberry

Co-Chair, Sweeteners ATAC

Copy:  Ambassador Ron Kirk, U.S. Trade Representative