WASHINGTON — The U.S. Department of Agriculture’s Commodity Credit Corp. said July 31 it bought 15,504 tonnes of raw cane sugar in its second tender to buy domestic sugar to exchange for refined sugar re-export credits in an effort to reduce domestic sugar supplies.
The C.C.C. received offers on 47,627 tonnes of raw cane sugar in its July 26 tender seeking 43,046 tonnes in an invitation issued July 23. The cost to the C.C.C. for buying the sugar was near $6.9 million, which averted an expected $19.2 million in loan forfeitures, the U.S.D.A. said. The purchased sugar was exchanged for 46,559 tonnes of refined sugar re-export credits. The exchange partner was American Sugar Refining Inc.
It was the second U.S.D.A. domestic sugar tender in the past two months. Results of the first tender announced July 10 resulted in the C.C.C. buying about 91,000 tonnes of domestic refined beet and raw cane sugar that were exchanged for re-export credits and Certificates of Quota Eligibility and resulted in the removal of about 300,000 tonnes of imported supply at a cost of $43 million.
The latest tender was for raw cane sugar only because raw cane posed the greatest risk for forfeitures at this time, the U.S.D.A. said. The department said it would continue to monitor the sugar market and would take action as necessary to reduce the cost of the sugar program, which is “expected to increase in 2013 due to record crops in North America and world prices that no longer support U.S. prices at the sugar program support level.”