The Obama administration may ask Congress to alter the sugar program as a way to better deal with possible shortages of refined sugar, according to Agriculture Under Secretary for Farm and Foreign Agricultural Services Jim Miller. Speaking at a recent sugar user conference in Miami, Fla., Miller said, "There is a potential flaw in the sugar program that Congress may wish to look at."
Following a 2008 fire at a refining facility in Savannah, Ga., there was a surplus of raw sugar in the United States and a shortage of refined sugar, Miller noted. He said USDA recognizes that while raw sugar stocks are currently adequate in aggregate, they "may not be positioned appropriately" for some refiners.
Domestic sugar processors are not expected to be able to fulfill their current marketing allotments in fiscal 2010, he said, noting the beet sugar allotment is 619,000 tons larger than production and the cane sugar allotment 779,000 tons larger than production.
"USDA will reassign company allocations in May 2010 to ensure that all domestic sugar processors have enough allocation to market their full (fiscal year) 2010 crop," Miller said. Miller told his audience that "If surplus allocation exists after domestic reassignment, the secretary may distribute it to raw imports as per the 2008 farm bill."
Miller did not detail the timing of any recommended sugar policy language, which would likely be written by the Office of the U.S. Trade Representative and USDA. That means any change could be part of the 2012 farm bill debate, but that it likely would not come sooner than that.
Miller said there is no immediate problem with sugar refining capacity in the United States.
The 2008 farm bill prohibits USDA from announcing any increase in the sugar import quota before April 1 unless there is an emergency shortage. Regarding the situation after April 1 Miller said short term stocks "appear to be adequate." Sugar supplies in the United States are currently adequate, but there is much uncertainty in forecasts for the rest of the year, Miller said. "We are carefully watching the global market for sugar due to the significant tightening of supplies throughout the world," he added.
