Press Releases

FOR IMMEDIATE RELEASE                                    CONTACT:   Phillip Hayes

Monday, August 3, 2009                                                            435-604-3113

PARK CITY, Utah—“After two years of large statistical surpluses, the world sugar [market] has entered a distinct deficit phase,” International Sugar Organization executive director Peter Baron today told attendees of the 26th International Sweetener Symposium.

Worldwide sugar supplies are at their tightest level since 2005/06, Dr. Baron said, because of “significant shortfalls in India and China, as well as a further contraction of production in Europe.”

The result is a 28-year high in dump market sugar prices, according to sugar market analyst Frank Jenkins.

The market rollercoaster is not a surprise to American Sugar Alliance (ASA) economist, Jack Roney, who also spoke on the conference’s market outlook panel.

“Sugar is the most distorted commodity market in the world because of subsidies and, although generally at depressed dump price levels, it is prone to wild supply and price swings,” he explained, noting that 80 percent of the sugar grown around the globe—including U.S. sugar—is consumed in the country where it's grown, rather than dumped on the volatile world market.

But American consumers have nothing to fear, Roney added, because U.S. sugar policy helps stabilize domestic supplies and prices and is designed to operate with little to no cost to the taxpayer.

Roney pointed to a July market update ASA provided the U.S. Department of Agriculture, which noted that supplies remain strong in the U.S. despite large food manufacturers clamoring for increased imports.

“U.S. cane refiners continue to have more than adequate supplies of raw sugar.  Most are operating at less than full capacity because the demand for refined sugar is not great.  Beet processors still have refined sugar to sell.  No food manufacturers are having any trouble locating refined sugar supplies.  Raw and refined sugar prices remain relatively stable,” the sugar producers wrote in the letter to the Secretary of Agriculture.

Roney said that industrial sugar users looking to depress domestic prices and open the U.S. up to the perils of the world dump market should be careful what they ask for.

He’s not alone.  McKeany-Flavell Company, a commodities research firm from Calif., issued a report earlier this year that found volatile prices, inconsistent quality, and delivery issues would result if the domestic food industry had to depend on foreign sugar.

Plus, Roney said if the USDA gives in to food manufacturers’ requests, it would “needlessly harm U.S. sugar farmers during an economic recession and incur taxpayer cost.”

-0-