USDA acts to relieve a potential shortfall in sugar
June 1, 2012
by Laurie Gorton
This spring, sugar supplies tightened with carryover projections falling far below levels sugar users find comfortable. Expressing concern, the Sweetener Users Association (SUA) asked the US Department of Agriculture (USDA) to ease import restrictions on raw and refined sugar, thus increasing the supply of world sugar coming into the US market “to assure adequate supplies and reasonable prices for this year and next.”
A few days later, on April 18, USDA acted to allow more world sugar into the US.
Although the department estimated this year’s domestic production to be 3% higher than the previous year, ending stocks were projected to be just 6.8% of total use, well under half of the normal level, according to SUA, and less than half of the USDA’s target range. SUA described the change as “a meaningful increase.”
In May, USDA predicted imports from Mexico could climb as much as 13%, a sizeable increase.
The US maintains import quotas for sugar because the world price is generally much lower than that of domestic sugar. Like SUA, the American Bakers Association and the Independent Bakers Association have long called for reform of the US sugar program because its policies lead to low supplies and higher prices.