USDA Sets Increased Sugar Tariff Rate Quota

On August 1, 2011, the USDA set the 2011-2012 sugar tariff rate quota (TRQ) at 1,231,497 short tons raw value and added an early entry stipulation for imports of September 1—120,000 STRV increase and a month earlier than typical years. Increases of this size typically occur when the Secretary of Agriculture believes waning supply may affect domestic demand and drive up prices to unreasonable levels.

“This action is in response to increased tightness in the U.S. raw cane sugar market,” the USDA said. The USDA further explained this increase occurred after evaluations determined the U.S. market called for additional supplies of raw cane sugar.

TRQ dictates the amount of raw, refined and specialty sugars that may be imported for domestic use. The total amount also includes 101,825 tons reserved for specialty sugar importation. Additionally, the USDA increased the overall allotment quantity (OAQ) for sugar by 164,740 tons bringing the market share to 85 percent. Specialty sugars falling under this quota include fondant, organic sugar, vanilla sugar, gold granulated sugar, evaporated cane juice and more.

Currently, any country can import raw sugar at the TRQ duty rate if a USDA-issued Certificate of Quota Eligibility accompanies the import. Most recently, the refined sugar TRQ was allocated to Canada and the remaining portion on first-come, first-served basis.

“We’re encouraged that USDA recognizes the tight domestic supplies that our manufacturers are facing,” said Clay Hough, International Dairy Foods Association senior group vice president. “We will continue to encourage government officials to increase the raw sugar TRQ by more tonnage to address the supply crunch and price spike U.S. sugar users currently face.”

Consumption, stocks and imports will all be carefully monitored to determine if program adjustments need to be made. Additional adjustments may also need to be made to prevent market disruptions, the USDA reported.