US Increases Refined Sugar Quota Imported to Meet Domestic Demand

The United States aims to set more sugar imports for meeting its domestic sugar for bakers, candy makers, and food manufacturers which is not enough to respond of these businesses. As the beet harvest was down about 10% this year. The expert forecasts 3.86 million tons of imported sugar to satisfy the domestic demand.

Speaking to a leading news agency, Jack Roney, director of economics and policy analysis for the American Sugar Alliance said, “The US market does not have enough sugar to meet the needs of these businesses and the USDA is gathering information about how much sugar is needed to be imported. The sugar is likely to be imported from Mexico, which has surplus sugar at present.

The poor growing weather and forecasts for smaller beet and sugar cane crops have affected sugar production in the US. As per the latest estimate of USDA, sugar production is projected at 8.6 million tons, decrease by 572,000 ton from the previous month’s prediction. The Agriculture Department projected that the country’s sugar stockpile could shrink to its lowest level in at least two decades.

About half the United States’ sugar normally comes from beets. According to statistics from the U.S. Department of Agriculture, the beet harvest was down about 10% this year. The effects are now rippling through America’s food industry. Last month, two big sugar producers announced that they won’t be able to deliver all the sugar they’d promised to candy-makers and bakers, including Tippin’s, a pie-maker in Kansas City, Kan.

Mark Boyer, the pie company’s president, said We are not freaking out about that just yet. There’s plenty of sugar out there, it’s outside the United States in places such as Brazil and Mexico and Thailand. The U.S. government just has to agree to let him buy it.

Because sugar is different from most other foods. For the past 40 years, the U.S. government has been managing the sugar supply, varying the amount of foreign sugar that’s allowed into the country year by year. But this year, the government will have to open the spigot and let more foreign sugar into the United States.

In fact, it will be a lot more. In a new report, economists at the Agriculture Department estimate that it will take 3.86 million tons of imported sugar to satisfy the domestic demand for sugar during the current fiscal year, which began in October and runs through September, 2020. Most of the sugar will come from Mexico, because trade agreements give Mexico first dibs on the American market.

The U.S. hasn’t imported so much sugar since 1981, back when Americans consumed more sugar and less high-fructose corn syrup.

Frank Jenkins, president of JSG Commodities, who follows sugar markets closely, says this switch to imported sugar will be more complicated than it seems at first. “What we’re trying to replace is refined beet sugar, all in the middle of the country. Minnesota, North Dakota, Colorado, Montana — those states are where we lost all the production,” he says.

Therefore, the sugar that’s replacing it is raw product from sugar cane. It will have to be processed at a handful of refineries in coastal locations such as Savannah, Ga., Baltimore and New York City. Those factories don’t usually have to handle so much sugar. “The cane-refining industry in the United States is going to have to increase its capacity utilization dramatically in the course of the coming year to unprecedented levels,” Jenkins says.