WASHINGTON — The Sweetener Users Association (SUA) said Dec. 14 that it had requested the Office of the US Trade Representative to immediately reallocate the raw sugar tariff-rate quota (TRQ) and the US Department of Agriculture to significantly increase the TRQ for refined sugar to help US food and beverage manufacturers meet demand at a time of historically tight sugar supplies.
“While SUA members support expanded sugar production and manufacturing and refining capacity in the United States in the long term, USTR and USDA can act now under existing laws and regulations to ease the acute supply crisis,” said Rick Pasco, president of the SUA.
The SUA cited converging issues causing supply constrictions this year, including two separate force majeure declarations by US beet sugar sellers and significant supply disruptions to raw cane sugar imports from the Philippines and the Dominican Republic. Consequently, prices remain at historically high levels and multiple sellers of sugar have withdrawn from the market, telling customers they have no uncommitted sugar to sell. The SUA also noted that the USDA has the authority to impose conditions sufficient to ensure that a refined import quota is open only to sugar that is immediately usable by manufacturers without the need for further processing.
Bulk refined sugar prices reported by Sosland Publishing Co. were 59¢ a lb f.o.b. for Midwest beet sugar, up 51% from a year earlier, although the price was nominal as beet processors were withdrawn from the market for the remainder of 2022-23 (October-September). One national cane refiner offered refined cane sugar from all locations at 68¢ a lb f.o.b. through Dec. 31 (up 24% from a year ago) and at 61¢ a lb for calendar 2023. Most other cane refiners are sold out or very well sold for the marketing year. Spot sugar in most areas was hard to find except from distributors at much higher prices than from beet processors and cane refiners. The Michigan Sugar Co. declared force majeure earlier in the year after lower-than-expected sugar production from its 2021 sugar beet crop. That action was lifted when 2022 crop beet sugar became available this fall. The Western Sugar Cooperative declared force majeure this fall after a disappointing 2022 beet crop.
US Customs and Border Protection said Nov. 23 it was detaining imports of raw sugar and sugar-based products from Central Romano Corp. in the Dominican Republic due to accusations of forced labor at the company’s facilities, which the company denied. That sugar is expected to be re-routed through other refiners and eventually be delivered to US ports. The Philippines earlier said it would not export any of its 2022-23 raw sugar TRQ allocation as it was needed to meet domestic needs after adverse weather reduced production. Of the 1,117,195-tonne total TRQ allocation for 2022-23, the Dominican Republic is the largest holder with 189,343 tonnes, and the Philippines is the second largest holder with 145,235 tonnes.
Further, there are concerns about 2022-23 sugar production and exports from Mexico, the largest sugar exporter to the United States, due to adverse weather with new crop cane harvest running behind last year’s pace. The US Department of Commerce set Mexico’s 2022-23 sugar export limit (in accordance with the agreement suspending the countervailing duty investigation on sugar from Mexico as amended and not part of the TRQ allocation) at 1,181,920 short tons, raw value, of which no more than 570,233 tons may be exported to the United States from Oct. 1 through Dec. 31, and no more than 890,326 tons from Oct. 1, 2022, through March 31, 2023. US imports of sugar from Mexico in October and November were estimated at 18,533 tons, down 73% from the same period a year earlier and the lowest two-month total in records back to 2007.
“We strongly urge USDA to use its existing authority to meet market needs,” Mr. Pasco said. “Timely action will prevent manufacturing slowdowns resulting from inadequate supplies, mitigate food price inflation and discourage further offshoring of sugar refining. Acting together, USTR and USDA can help sugar-using companies deliver the products Americans love.”The USDA administers the US sugar program and issues domestic market allocations, the USTR allocates TRQ export amounts to approved countries, and the DOC sets the import level from Mexico based on the USDA’s determination of US sugar needs.