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FOR IMMEDIATE RELEASE CONTACT: Phillip Hayes
Monday, July 13, 2009 202-507-8303
WASHINGTON—Members of the American Sugar Alliance (ASA) last week provided the U.S. Department of Agriculture (USDA) an update on the domestic sugar market, which remains sufficiently supplied.
“U.S. cane refiners continue to have more than adequate supplies of raw sugar. Most are operating at less than full capacity because the demand for refined sugar is not great. Beet processors still have refined sugar to sell. No food manufacturers are having any trouble locating refined sugar supplies. Raw and refined sugar prices remain relatively stable,” the sugar producers wrote in a July 10 letter to the Secretary of Agriculture.
USDA officials have come under pressure from industrial sweetener users in recent months to allow additional imports from foreign sugar producers, which would depress U.S. prices, harm U.S. farmers, and increase profits at food companies that traditionally do not pass savings from lower ingredient prices along to consumers. Additional imports are unneeded, the ASA contends.
“Early beet harvesting will begin in just two months and, as harvests get underway throughout beet and cane areas, the market will move into its heaviest oversupply period,” according to ASA. Foreign sugar will flow in under World Trade Organization and CAFTA import commitments, "stocks will build through the spring… And, most importantly, the market is open to unlimited supplies from Mexico.”
Mexican imports ballooned to an all-time high this year, and the ASA says Mexican sugar shipments could far exceed USDA estimates again next year.
The latest market supply-demand estimates released Friday by the USDA showed an unexpected 150,000 short tons of Mexican sugar arriving before year’s end. That brings total expected Mexican sugar shipments up to 1.3 million tons—more than 10 percent of the U.S. market and far greater than the 165,000 tons the USDA is predicting next year.
Food manufacturers made a similar plea for additional imports at the same time last year, but the USDA denied their requests and routinely revised government estimates to reflect growing sugar supplies. If the food manufacturers’ request had not been denied, sugar loan forfeitures would have occurred, costing taxpayers millions.
The ASA believes taxpayers similarly would be left footing the bill if candy companies are granted additional imports this year. That’s why sugar producers urged the USDA to use extreme caution.
“With chronic oversupply during the first half of the year, any tightness next year would not emerge until the summer,” they wrote. “USDA would have adequate time to prevent any possible tightness through an import-quota increase, if necessary, on or after April 1.”
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July 10, 2009 ASA Letter to Sec. Vilsack |
