USDA Announces Increase and Reassignment of Fiscal Year 2012 Sugar Overall Allotment Quantity and an Increase of Fiscal Year 2012 Raw Sugar Tariff-Rate Quota

WASHINGTON, April 18, 2012 — The U.S. Department of Agriculture (USDA) today announced a 51,000 short tons raw value (STRV) increase in the fiscal year (FY) 2012 Overall Allotment Quantity (OAQ), a reassignment of projected surplus beet sugar marketing allocations between beet processors, and a reassignment of 420,000 STRV of surplus cane sugar marketing allotment from domestic sugarcane processors to a FY 2012 raw sugar tariff-rate quota (TRQ) increase. These actions, based on the FY 2012 Sugar Marketing Allotment program, are effective April 19. The Federal Register notice is viewable at http://www.ofr.gov. The Office of the U.S. Trade Representative (USTR) will announce country allocations of this TRQ increase, as well as any reallocation of shortfalls of the FY 2012 TRQ.

The 420,000 STRV raw sugar TRQ increase, when combined with an estimated reallocation of 70,000 STRV, is expected to yield a net increase in raw sugar imports of 450,000 STRV after normal TRQ slippage because not all supplying countries will fill their import quota allocations. This TRQ increase is not currently expected to increase FY 2012 domestic sugar supplies sufficiently to attain a level USDA considers adequate. USDA used an ending stocks-to-use level of 14.5 percent in estimating the "reasonable ending stocks" parameter for the most recent FY 2012 sugar market quarterly review mandated by statute. Significant uncertainties about FY 2012 Mexican imports, domestic refined and raw sugar demand, the early sugar beet crop, and other market factors make it prudent for USDA to not increase imported supplies further at this time. USDA will re-evaluate market conditions in June, as required by statute, and, as determined appropriate, increase the TRQ to bring the expected FY 2012 ending-stocks-use to within the traditional range that USDA considers adequate, i.e. 13.5 percent to 15.5 percent.

Increase and Reassignment of Fiscal Year 2012 Overall Allotment Quantity (OAQ)

USDA today announced an increase in the FY 2012 OAQ to 9,507,250 STRV, which represents 85 percent of the demand estimate published in the April 2012 World Agricultural Supply and Demand Estimates (WASDE) report. The increase is split in accordance with the Sugar Marketing Allotment program, 54.35/45.65 percent between the beet and cane sectors, or 27,719 and 23,281 STRV, respectively. USDA evaluated each sugar beet processor's ability to market its full allocation, and decided not to reassign beet sugar allotment to imports at this time due to uncertainties that still exist in forecasting FY 2012 sugar production. However, beet sugar marketing allocations are transferred from beet sugar processors with surplus allocation to those with deficit allocation (see Table).

In addition, USDA determined that all sugarcane processors have surplus allocations of the FY 2012 cane sugar marketing allotment. Therefore, the 420,000 STRV reassignment to the raw sugar TRQ increase reduced all sugarcane states' sugar marketing allotments. The total cane sector allotment decreased from 4,316,778 to 3,920,060 STRV. The new cane state allotments are Florida, 1,926,658 STRV; Louisiana, 1,554,521 STRV; Texas, 170,745 STRV; and Hawaii, 268,135 STRV. The FY 2012 Sugar Marketing Allotment program will not prevent any domestic sugarcane processor from marketing all of its FY 2012 sugar supply. Due to uncertainties that still exist in forecasting each company's and sector's FY 2012 sugar production, further reassignments are likely.

FY 2012 Raw Sugar TRQ Increase

On July 30, 2011, USDA established the FY 2012 TRQ for raw cane sugar at 1,231,497 STRV (1,117,195 metric tons raw value, MTRV*), the minimum to which the United States is committed under the World Trade Organization (WTO) Uruguay Round Agreement on Agriculture. Pursuant to Additional U.S. Note 5 to Chapter 17 of the U.S. Harmonized Tariff Schedule (HTS) and Section 359k of the Agricultural Adjustment Act of 1938, as amended, USDA announced in the Federal Register an increase in the raw cane sugar TRQ of 420,000 STRV (381,018 MTRV). With this increase, the overall FY 2012 raw sugar TRQ will be 1,651,497 STRV (1,498,213 MTRV). Raw cane sugar under this quota must be accompanied by a certificate of quota eligibility and may be entered until September 30, 2012. USTR will allocate this increase among supplying countries and customs areas.

USDA will closely monitor stocks, consumption, imports, and all sugar market and program variables on an ongoing basis. Additional adjustments to import TRQs and domestic marketing allotments may be needed later in FY 2012 to ensure an adequate sugar supply for the domestic market, and prevent or correct market disruptions.

* Conversion factor: 1 metric ton = 1.10231125 short tons.

The revised FY 2012 cane and beet sugar marketing allotments and processor allocations is shown below.

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