WASHINGTON — The Sweetener Users Association (S.U.A.), in a letter to the U.S. Department of Agriculture, formally requested a net increase of 400,000 short tons, raw value, of sugar be made available to the U.S. market.
“There can be no further doubt about the need to increase sugar supplies for the current fiscal year,” the S.U.A. said in a letter to U.S.D.A. undersecretaries Ted McKinney and Bill Northey, citing data from the U.S.D.A.’s May 10 World Agricultural Supply and Demand Estimates (WASDE) report. The association urged the U.S.D.A. to work with the Office of the U.S. Trade Representative and the U.S. Department of Commerce to “reallocate the tariff-rate quota (T.R.Q.), increase Mexico’s access to the U.S. market, and (if necessary due to the availability of Mexican sugar) increase the T.R.Q.”
The S.U.A. noted that the U.S.D.A. lowered its forecast 2018-19 sugar ending stocks-to-use ratio to 12.2% in the May WASDE from 13.2% in April, which already was below the lower end of U.S.D.A.’s desired stocks range (13.5% to 15.5%). It also noted that the U.S.D.A.’s comment in the WASDE that beet sugar from the new crop produced before Oct. 1 will be about 123,000 tons lower than the average of the five previous years “clearly shows a danger of short supplies in the third and fourth fiscal quarters.” The sugar marketing year runs from Oct. 1 to Sept. 30. Further, the S.U.A. noted that the U.S.D.A. said the shortfall in the 2018-19 T.R.Q. is increased by 22,000 tons, which indicates the U.S.D.A.’s Foreign Agricultural Service has new information about the likely failure of some countries to fill their quotas. Finally, the S.U.A. said the U.S.D.A.’s increase from April in high-tier imports to 70,000 tons “based on pace to date” indicated a price imbalance in the domestic market.
“An immediate reallocation, along with additional import access, for a total net addition to domestic supplies of 400,000 short tons, raw value will contribute to market stability and prevent the kind of short-supply situation that will prompt additional high-tier imports,” the S.U.A. said in its letter dated May 13. “We strongly urge you and your colleagues to act now.”
The S.U.A. also expressed concern about sugar supply in the new marketing year that begins Oct. 1.
“The problem of low stocks becomes still more concerning in looking at U.S.D.A.’s initial projection for the 2019-20 year,” the S.U.A. said. “The stocks-to-use ratio is forecast to fall still further to 12%, and U.S.D.A. states that ‘slower-than-average planting progress in the Upper Midwest and Michigan has dampened prospects for significant gains in the national yield over last year.’”