The USDA today announced an increase to the fiscal year 2016 Overall Allotment Quantity (OAQ) for domestic sugar, reassigned some of the projected surplus sugar marketing allotments among processors, and reassigned part of the surplus cane sugar marketing allotment to raw cane sugar imports. USDA recognizes that America's beet sugar producers have made significant investments in a strong 2016 crop, but they continue to face uncertainty.
Based on the projections in the May 10, 2016 World Agricultural Supply and Demand Estimates (WASDE) report, USDA took this action as required by the Farm Bill in order to maintain an adequate sugar supply in an uncertain market. This uncertainty is in part due to inaction on GE labeling legislation and lack of consumer information about genetic technology.
USDA has reassigned 500,000 STRV (short tons raw value) cane sector domestic supply shortfall to imports. Of that, 300,000 STRV is reassigned to imports already expected to enter the United States; 140,000 STRV to an increase in the U.S. raw sugar tariff-rate quota from WTO quota holders; and 60,000 STRV to sugar expected to be imported from Mexico pending the approval of the Department of Commerce.
The overall fiscal 2016 U.S. raw sugar tariff-rate quota is now 1,371,497 STRV. The Office of the U.S. Trade Representative will allocate this increase among supplying countries. Raw cane sugar under this tariff-rate quota must be accompanied by a certificate for quota eligibility and may be entered by September 30, 2016.
USDA has requested that the U.S. Department of Commerce increase the FY 2016 Export Limit for Mexico by 60,000 STRV, under the provisions of the Agreement Suspending the Countervailing Duty Investigation on Sugar from Mexico (Dec. 19, 2014, 79 FR 78044). To ensure that this is the type of sugar for which there is an increasing demand in the U.S. market, and which also requires further processing, this additional sugar must have a polarity of less than 99.2 degrees.