USDA Announces Increase in FY 2011 Raw Sugar TRQ and Reassignment of Sugar Marketing Allotments

WASHINGTON, April 11, 2011 – The U.S. Department of Agriculture (USDA) today announced a reassignment of 325,000 short tons raw value (STRV) of surplus cane sugar marketing allotment from domestic sugarcane processors to the fiscal year (FY) 2011 raw sugar tariff-rate quota (TRQ). This reassignment is effective April 12. The Federal Register notice is viewable online here: http://www.ofr.gov/OFRUpload/OFRData/2011-08570_PI.pdf. The Office of the U.S. Trade Representative (USTR) will announce country allocations of this TRQ increase, and will also reallocate shortfalls of the FY 2011 TRQ.  USDA is today announcing the reassignment of projected surplus beet sugar marketing allocations under the FY 2011 Sugar Marketing Allotment program.  

The 325,000 STRV TRQ increase is expected to yield a net increase in imports of 260,000 STRV due to normal TRQ slippage. The net quantity will offset the domestic raw sugar production lost because of the January 2011 Florida freezes, as estimated by Florida processors’ reports to USDA during the January-March 2011 period. This increase in raw sugar imports, plus the net sugar estimated to be imported through the TRQ reallocation, is expected to yield an ending FY 2011 stocks-to-use ratio of 13.5 percent and provide a FY 2011 sugar supply that reduces the need for imports under the unrestricted high-tier tariff.         

FY 2011 Reassignment of Sugar Marketing Allotments

USDA’s Commodity Credit Corporation (CCC) determined that all sugarcane processors have surplus allocations of the FY 2011 cane sugar marketing allotment. Therefore, with this 325,000 STRV reassignment to the raw sugar TRQ increase, all sugarcane states’ sugar marketing allotments are reduced, with the total cane sector allotment decreased from 4,215,892 to 3,890,892 STRV.  The new cane state allotments are Florida, 1,856,850 STRV; Louisiana, 1,577,810 STRV; Texas, 173,016 STRV; and Hawaii, 283,216 STRV.  The FY 2011 sugar marketing allotment program will not prevent any domestic sugarcane processors from marketing all of their FY 2011 sugar supply. 

In addition, the CCC evaluated each sugar beet processor’s current inventories, estimated production, expected marketings, and other factors affecting the beet sector’s ability to market its full allocation.  Due to uncertainties that still exist in forecasting beet processors’ FY 2011 sugar production, no beet sugar allotment is reassigned to imports at this time.  However, beet sugar marketing allocations are transferred from beet sugar processors with surplus allocation to those with deficit allocation. 

Due to uncertainties that still exist in forecasting each company's and sector's FY 2011 sugar production, further reassignments are likely.

FY 2011 Raw Sugar TRQ Increase

On August 5, 2010, USDA established the FY 2011 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 325,000 STRV (294,835 MTRV).  With this increase, the overall FY 2011 raw sugar TRQ will be 1,556,497 STRV (1,412,030 MTRV). Raw cane sugar under this quota must be accompanied by a certificate of quota eligibility and may be entered under subheading 1701.11.10 of the HTS until September 30, 2011.  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 2011 to ensure an adequate sugar supply for the domestic market, avoid forfeitures, and prevent or correct market disruptions.

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

The revised 2011 crop year cane and beet sugar marketing allotments and processor allocations is shown below.

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