WASHINGTON, July 24, 2017 – The U.S. Department of Agriculture (USDA) today announced several fiscal year (FY) 2017 sugar program adjustments that are being made in order to ensure an adequate supply of raw sugar in the U.S. market. The actions taken by USDA include:
- increasing the Overall Allotment Quantity (OAQ) for domestic sugar;
- reassigning beet sugar marketing allotments among processors;
- reassigning a surplus cane sugar marketing allotment of 870,000 short tons raw value (STRV) to imports; and
- increasing the U.S. raw sugar tariff-rate quota (TRQ) by 269,724 STRV.
USDA has also requested that the U.S. Department of Commerce increase the FY 2017 Mexico export limit by 103,932 STRV and that the Office of the U.S. Trade Representative (USTR) reallocate the expected shortfall in the FY2017 raw sugar TRQ of 95,344 STRV.
OAQ Increase and Reassignments
Sugar program provisions require the Secretary of Agriculture to make adjustments to the OAQ based on quarterly re-estimates so that the OAQ is not less than 85 percent of domestic human consumption for the crop year. Accordingly, USDA today increased the FY 2017 OAQ to 10,455,000 STRV, which is 85 percent of the 12,300,000 STRV estimate for domestic human consumption published in USDA’s July 2017 World Agricultural Supply and Demand Estimates report. Under the requirements of the sugar program, 45.65 percent (4,772,708 STRV) is allocated to cane sugar, and 54.35 percent (5,682,293 STRV) to beet sugar.
USDA has reassigned 870,000 STRV of the domestic cane sector supply shortfall to raw cane sugar imports. Of that:
- 28,932 STRV is reassigned to raw cane sugar imports from Mexico of less than 99.2 polarity;
- 75,000 STRV is reassigned to imports from Mexico of less than 99.5 polarity;
- 269,724 STRV is reassigned to an increase in the U.S. raw sugar TRQ; and
- the remainder is assigned to imports already expected.
In addition, USDA reassigned beet sugar marketing allocations from certain U.S. processors with inadequate supplies to other processors needing additional allocations. After this action, there was no surplus beet allotment to reassign to raw cane sugar imports.
The revised FY 2017 overall beet/cane allotments and allocations table can be found on the FAS website: https://www.fas.usda.gov/programs/sugar-import-program/fy-2017-beetcane-...
Raw Sugar TRQ Increase
On May 6, 2016, USDA established the FY 2017 TRQ for raw cane sugar at 1,231,497 STRV (1,117,195 metric tons raw value), the minimum to which the United States is committed under the World Trade Organization Uruguay Round Agreement on Agriculture. Today’s 269,724 STRV increase in the raw sugar TRQ, combined with the requested reallocation of the TRQ shortfall by USTR and the requested increase in the export limit for Mexico by the Commerce Department, is expected to yield a net increase in raw sugar imports of 414,000 STRV, since some shortfalls are expected.
With this increase, the overall FY 2017 raw sugar TRQ is now 1,501,221 STRV. Raw cane sugar under this quota must be accompanied by a certificate for quota eligibility. Sugar entering under this revised TRQ will be permitted to enter U.S. Customs territory through October 31, 2017, a month later than usual, to increase the chances for supplying countries to fill their import quotas.
USDA closely monitors sugar production, stocks, consumption, imports and other variables. Based on these variables, USDA may need to make additional adjustments to imports or domestic marketing allotments to ensure an adequate supply for the domestic market, avoid forfeitures, and prevent or correct market disruptions.
The Federal Register notice announcing these changes can be found online here.
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