The Sugar Beat
Market Paints Clear Supply Picture
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Their exploits have left sugar industry officials and many lawmakers scratching their heads. "There's plenty of sugar available right now, and we’ve got lots to sell,” explained John Doxsie, the president of United Sugars, one of the largest sugar marketers in the country. “No customer is saying there is not enough sugar to buy now, and none of our customers are saying there is not enough sugar to contract for future delivery." Doxsie believes there is a disconnect between the people buying sugar for food manufacturers and their lobbyists. Brian O’Malley, president of the well-known Domino Sugar, has a similar view of the market. "There is no shortage, and we’ve got plenty of room to sell additional sugar if anyone needs it," he added. Farmers from the hurricane-ravaged Louisiana were even more forceful in their assertion that the market does not need additional imported sugar. “We’re in the middle of harvest, we’re facing skyrocketing input costs that threaten to drive us out of business, and lobbyists for billion-dollar multinationals are in Washington trying to boost their huge profits and make it harder for us to make ends meet,” explained Jessie Breaux, a Louisiana cane farmer. “You just have to look at the price I’m getting for sugar to see the market has plenty of sugar right now,” he continued. “If this price continues to fall I’ll have neighbors who will be forced to exit the sugar business—then there really will be supply issues.” In the past month raw sugar prices have dropped by nearly 10%, and refined sugar prices by more than 12%, clear indications that sugar supplies are more than adequate. And the U.S. Department of Agriculture (USDA) recently predicted supplies to climb even more. Compared with its forecast of a month ago, USDA now predicts the market will likely have an additional 200,000 tons of sugar from sugarbeets once harvest is concluded in the Midwest. Some sugar market analysts expect that figure to grow even higher as this high-yielding crop is pulled from the ground. The USDA currently has a request pending from large candy companies to ignore clear direction in the 2008 Farm Bill and bring even more subsidized foreign sugar into the United States. Breaux is hopeful that the USDA will be prudent and deny this request. “The Farm Bill clearly lays out that the USDA should wait until April to make such a decision so that it has a better understanding of both beet and cane harvests,” he said. “If they ignore the Farm Bill and act rashly it will push some of us over the cliff.” |
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