TRQ Increase Announced
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 contained in link: http://www.ofr.gov/OFRUpload/OFRData/2012-09400_PI.pdf
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 in net from 4,316,778 to 3,920,060 STRV. 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 Agreements. 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, the Secretary of Agriculture today increased the quantity of raw cane sugar eligible for the lower tier of duties of the HTS during FY 2012 by 420,000 STRV(381,018 MTRV). With this increase, the overall FY 2012 raw sugar TRQ is now 1,651,497 STRV (1,498,213 MTRV). Raw cane sugar under this quota must be accompanied by a certificate for quota eligibility and may be entered until September 30, 2012. The Office of the U.S. Trade Representative will allocate this increase among supplying countries and customs areas. 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” parameterfor 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 increase, as determined appropriate, the TRQ to bring the expected FY 2012 ending-stocksuse to within the traditional range that USDA considers adequate, i.e., 13.5 to 15.5 percent.
* Conversion factor: 1 metric ton = 1.10231125 short tons.
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