USDA announces further increases in sugar supplies

The U.S. Department of Agriculture on Feb. 2 further modified the FY 2006 sugar program to allow increased imports to meet domestic market needs. USDA announced these actions in response to a continuing tight sugar market resulting largely from disastrous weather events that greatly reduced the FY 2006 domestic supplies. These actions are expected to significantly increase supplies in the short term and across the remainder of the marketing year.

USDA earlier announced increases in the FY 2006 Overall Allotment Quantity of amounting to a cumulative 525,000 short tons, raw value (STRV) for a total of 9,350,000 STRV. Because domestic cane producers can supply none of this increased allotment and domestic sugar beet processors can supply only a small amount, the Commodity Credit Corporation (CCC) is reassigning 500,000 STRV to imports. The import increase will be divided evenly between the World Trade Organization (WTO) FY 2006 tariff rate quota (TRQ) for refined sugar and the WTO TRQ for raw sugar.

Increase overall allotment quantity (OAQ)

The OAQ increase of 525,000 STRV is expected to permit all beet and cane sugar produced in the United States to be marketed domestically in FY 2006. The beet sugar allotment is increased by 285,338 STRV to 5,081,725 STRV. The cane sugar allotment is increased by 239,663 STRV to 4,268,275 STRV.

Neither the beet nor the cane sector has sufficient supply to meet these new allotments, thus the shortfalls will be reassigned to imports as required by statute. Data provided by the beet processors indicate the FY 2006 beet sugar supply is 242,000 STRV less than the new allotment. The beet sugar shortfall reassigned to imports is less than the increase in the beet sugar allotment to enable complete marketing of all the FY 2006 beet sugar supply.

Domestic sugarcane processors have an estimated 258,000 STRV shortfall for reassignment to imports. For cane sugar, the reassignment to imports is slightly larger than the increase in the cane sugar allotment because the cane sector already had a small amount of surplus allotment prior to this action. State marketing allotments and processor allocations will be announced later. CCC expects all domestic sugar beet and sugarcane processors to be able to market 100 percent of their FY 2006 sugar supply.

FY 2006 WTO refined sugar TRQ increase

USDA on Feb. 2 further increased the FY 2006 WTO refined sugar TRQ, raising the amount from 279,013 STRV to 529,013 STRV. The FY 2006 total WTO refined sugar TRQ is composed of the WTO-minimum amount of 24,251 STRV; an additional 29,762 STRV announced on August 12, 2005 for specialty sugar; 75,000 STRV announced on September 9, 2005; 150,000 STRV announced on December 2, 2005 and today's additional 250,000 STRV.

The United States Trade Representative (USTR) will allocate the additional quantity announced today. Prior to allocation, USTR will consult with countries to determine refined sugar availability.

FY 2006 WTO raw sugar increase

USDA today also further increased FY 2006 allowable raw cane sugar imports by 250,000 STRV. The total FY 2006 raw cane sugar TRQ is now 1,901,497 STRV, comprised of the WTO-minimum amount of 1,231,497 STRV; an additional 120,000 STRV announced on Aug. 19, 2005; 300,000 STRV announced December 2, 2005; and today's additional 250,000 STRV.

The additional TRQ quantity of 250,000 STRV will be allocated by USTR and entry of the sugar into U.S. Customs Territory will require certificates of quota eligibility (CQEs). Prior to allocation, USTR will survey all countries that receive raw sugar allocations and reassign the allocation from those countries that state they cannot fill their FY 2006 raw sugar TRQ. To ensure timely availability to the domestic market, this additional quantity must be entered into the United States by July 1, 2006.

Date: 2/23/06