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Sugar Industry Asks for Increase in Tariff-Rate Quotas

16 April 2012

US - The World Agricultural Supply and Demand Estimates sharply illustrates the need for a substantial and immediate increase in the tariff-rate quotas (TRQs) for raw and refined sugar, as well as a reallocation of existing TRQs and other steps, in order to assure adequate supplies at reasonable prices during the balance of this fiscal year and into the next season, says the Sweetner Users Association.

In a letter to the US Trade Representative, Ron Kirk, the Association said: "Compared to projections made as recently as March, this month's projections have reduced total US supplies for 2011/12 by 250,000 short tons, raw value (STRV). This reduction includes a reduction in expected imports from Mexico of 385,000 STRV. Ending stocks are now projected at just 6.8 per cent of total use, well under half of a normal level even under the most conservative assumptions.

"Clearly, there is no case to be made for delaying a major TRQ increase. Especially at this point in the season, one must expect that any TRQ will include around a 10 per cent shortfall, so amounts need to be adjusted for this reality. Using USDA's estimate of total consumption, attaining a stocks-to-use target of 14.5 per cent would require a total TRQ increase of 982,000 STRV, while attaining 15.5 per cent (the amount that our organization has consistently advocated) would require the TRQ to rise by 1,110,000 STRV.

"Of the total TRQ increase, we believe a substantial portion should be refined sugar, recognizing that the lost Mexican imports would have included substantial amounts of refined sugar. Through February, imports from Mexico totaled 352,000 metric tons, raw value (MTRV), but only 76,000 MTRV went to refiners. Last year, imports from Mexico to non-reporting entities accounted for 966,000 tons of food use.

"The Sweetner User Association believes that several additional steps are also needed, beyond a TRQ increase. The Department should permit early entry of the 2012/13 quota during the latter part of this year. In addition, the Department should work with the Office of the US Trade Representative to reallocate existing TRQ amounts, reducing shortfalls to the maximum extent possible."

Further Reading

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