USDA ESTABLISHES 2008 FISCAL YEAR ALLOTMENT

Published online: Sep 24, 2007 USDA
Viewed 127 time(s)
USDA ESTABLISHES 2008 FISCAL YEAR TARIFF RATE QUOTA AND OVERALL ALLOTMENT QUANTITY On August 10, 2007, the U.S. Department of Agriculture (USDA) established the FY 2008 raw sugar tariff-rate quota (TRQ) at 1,231,497 short tons, raw value (STRV), the U.S. minimum access commitment level under the World Trade Organization (WTO). The USDA also announced that raw sugar TRQ imports would not be subject to shipping patterns. The justification was that the raw sugar TRQ level was lower than previous years. The USDA established the FY 2008 refined sugar TRQ at 94,251 STRV for which the sucrose content, by weight, in the dry state, must have a polarimeter reading of 99.5 degrees or more. This includes the United States minimum access commitment under the WTO (24,251 STRV) and an additional specialty sugar amount of 70,000 STRV to accommodate a rapidly expanding organic food sector. Included within the WTO refined sugar TRQ is a minimum specialty sugar TRQ of 1,825 STRV. On August 10, 2007, the USDA announced the FY 2008 overall allotment quantity (OAQ). The OAQ was established at 8.450 million STRV. In its announcement, the USDA noted that the projected ending stocks-to-use ratio in the August 2007 WORLD AGRICULTURE SUPPLY AND DEMAND ESTIMATES (WASDE) was 13.3 percent, a rate below the traditional range for the U.S. sugar market. According to the provisions of the 2002 Farm Act, the OAQ was allocated to the beet and cane sectors as follows: + Beet sugar: 4,592,575 STRV + Cane sugar: 3,857,425 STRV The cane sugar allocation exceeded projected cane sugar production in the August 2007 WASDE by 187,000 STRV. However, given production and cane stockholding uncertainties before the start of the 2008 fiscal year, the USDA officially projected a surplus cane allotment at only 70,000 STRV. This amount was reassigned to imports. The USDA promised to make appropriate adjustments to the OAQ, as well as the TRQ, during the year to ensure an adequate supply of sugar for the domestic market, and to avoid sugar loan forfeitures and to prevent market disruptions. On September 12, 2007, the USDA released its latest supply and use estimates for FY 2007 and projections for FY 2008 in the WASDE report. FY 2008 sugar production is projected at 8.342 million STRV, a decrease of about 152,000 STRV from FY 2007. Beet sugar is forecast at 4.657 million STRV (371,000 STRV, or 7.4 percent, lower than FY 2007), and cane sugar is forecast at 3.684 million STRV (219,000 STRV, or 6.3 percent, higher than FY 2007). The USDA projects that TRQ imports in FY 2008 will equal 1.354 million STRV. Raw sugar TRQ shortfall is projected at 70,000 STRV, implying raw sugar TRQ entries of 1.161 million STRV. Sugar imports under the Dominican Republic and Central Free Trade Agreement (DR/CAFTA) are projected at 98,590 STRV. Adding in the amount of the refined sugar TRQ brings the total to the 1.354 million STRV projection. Other program sugar imports outside the sugar TRQ for FY 2008 are projected to total 425,000 STRV. Other USDA import programs include the Refined Sugar Re-export Program, the Sugar-Containing Products Program, and the Polyhydric Alcohol Program. Sugar from imported syrups is projected at 5,000 STRV. High-tier tariff sugar imports, mostly from Mexico, are projected at 325,000 STRV. The USDA estimates FY 2007 sugar deliveries for food and beverage use at 9.850 million STRV and FY 2008 deliveries at 10.000 million STRV. Ending stocks are projected as the difference between total supply and total use. For FY 2007, ending stocks are estimated at 1.772 million STRV, implying an ending stocks-to-use ratio of 16.9 percent. Ending stocks for FY 2007 are the beginning stocks for FY 2008. Ending stocks for FY 2008 are projected at 1.803 million STRV, implying an ending stocks-to-use ratio of 17.3 percent.