U.S. Allows More Sugar Imports

WASHINGTON - Dec 5/05 - SNS - The USDA increased allowable sugar imports for the 2006 fiscal year (FY) by another 450,000 short tons raw value (STRV).

This amount is composed of a 150,000 STRV increase in the global, first-come, first-served FY 2006 tariff rate quota (TRQ) for refined sugar, and a 300,000 STRV increase in the World Trade Organization (WTO) raw sugar TRQ. This action is in response to the sugar market situation resulting from hurricane damage to the cane crop and disruption in refinery activities, delays to beet and cane harvesting, and various transportation dislocations.

With this increase, the FY 2006 WTO raw sugar TRQ is now 1,651,497 STRV. The additional TRQ quantity will be allocated by the U.S.Trade Representative. Entry of this sugar will require certificates for quota eligibility. The 300,000 STRV increase in the WTO raw sugar TRQ will be made in the same manner as has been done in prior increases of this TRQ.

The global refined TRQ, previously established on September 9, 2005 at 82,815 STRV, is now 232,815 STRV. The authority for modification of a quantitative limitation previously established for the sugar TRQs is in the Harmonized Tariff Schedule of the United States, Chapter 17, Additional U.S. Note 5.

To qualify for entry under the refined sugar TRQ, the sucrose content, by weight, in the dry state must have a polarimeter reading of 99.5 degrees or more. Sugar entering under the global refined TRQ must be entered in containers of 120 metric tons (MT) or less. It has been determined that tranches are needed to allow for orderly marketing of the refined sugar TRQ. The TRQ will open in four 37,500 STRV tranches on the following dates: December 9, 2005; December 29, 2005; January 10, 2006; and January 24, 2006. Entry of this sugar will not require certificates for quota eligibility.

USDA is reassigning 450,000 STRV of the current cane sugar marketing allotment to imports because the recent hurricanes have significantly reduced the sugar production potential in Louisiana and Florida. USDA will announce revised cane state allotments and sugarcane processor allocations when the company-specific damages are better understood.

USDA has announced in the Federal Register an extension of the period in which refiners licensed under the Refined Sugar Re-Export Program must export refined sugar to offset a corresponding import of raw sugar from 90 days currently to 270 days. This extension for licensed refiners will expire on September 30, 2006. This action should provide additional short-run liquidity to the market.

USDA recognizes that more sugar than the quantity provided for by this action may be needed in this fiscal year to balance the market. USDA will continue to assess domestic refining capacity, domestic production and consumption and the relationship between the Mexican and American sweetener markets as a common market is approached in January 2008, and market developments as it makes these adjustments.