NEWS
UNITED STATES DEPARTMENT OF AGRICULTURE
Office of Communications News Room 460-A
Washington, DC 20250-1300
Internet: News@usda.gov Phone: 202-720-9035
World Wide Web Home Page: http://www.usda.gov
Release No. 0294.04
Stevin Westcott (202) 720-4178
USDA ANNOUNCES FISCAL YEAR 2004 AND 2005
SUGAR PROGRAM PROVISIONS
WASHINGTON, July 16, 2004 -- The U.S. Department of
Agriculture today announced details for the operation of
the sugar program for the remainder of this fiscal year
(FY) and for FY 2005. Specifically, the Department
announced that domestic marketing allotments again will be
in effect for the upcoming marketing year; the FY 2005
overall allotment quantity (OAQ) and the quantities for
beets and cane; and the FY 2004 and 2005 allowable
quantities of imports of raw, refined, and specialty
sugars.
FY 2004 Overall Allotment Quantity to Remain Unchanged
In accordance with the Agricultural Adjustment Act of
1938, as amended (the Act), the Department conducted a
quarterly review of 2003 crop total use, carry-in stocks,
production and imports. On the basis of this analysis, the
FY 2004 OAQ will remain unchanged at 8.25 million short
tons, raw value (STRV). This amount was adjudged to be
sufficient for the efficient operation of the market
through the remainder of the year and any modification of
the FY 2004 OAQ would unnecessarily disrupt established
arrangements between sugar buyers and sellers.
FY 2005 Overall Allotment Quantity Announced
The Department�s forward-looking analysis also led to
the determination that marketing allotments again would be
required for the FY 2005 marketing year to meet the
statutory program objectives of an orderly market and
program operation at no cost to the taxpayer to the maximum
extent practicable.
Preliminary market indicators incorporating the
latest available information from the July 12, 2004 USDA
World Agricultural Supply and Demand Estimates (WASDE)
report follow:
FY 2004 FY 2005
(000 STRV)
Carry-in stocks 1,661 2,181
Production 8,844 8,480
Imports 1/ 1,746 1,614
Total Use 10,070 10,105
Ending Stocks 2,181 2,170
1/Revised to reflect TRQ for specialty sugars contained in
this announcement.
These estimates indicate that ending stocks would be
2.17 million STRV and the corresponding stocks-to-use ratio
would be 21.5 percent in the absence of marketing
allotments. This ratio, higher than traditional levels,
suggests a likelihood of forfeiture of sugar pledged as
collateral for CCC loans and thus the need for market
allotments to meet the objectives of the Act.
USDA is establishing the OAQ at 8,100,000 STRV for FY
2005. The calculation of the OAQ is based on the estimate
of domestic sugar food use less an estimate of sugar
supplied from alternative (non-OAQ) sources. The
Department emphasizes that there is considerable market
uncertainties surrounding the underlying estimates,
particularly domestic food use, non-OAQ supplies that may
be available from the sugar re-export program, and sugar
sold this fiscal year for delivery in FY 2005.
USDA will closely monitor stocks, consumption,
imports, and all other program variables on an ongoing
basis. Appropriate adjustments may be made at any time
during the year to the OAQ as required, both to ensure an
adequate supply for the domestic market in FY 2005 and to
avoid forfeitures.
When the OAQ is allocated to the sectors as required
by the Act, the resulting allocations are (000 STRV):
Beet Sugar: 4,402
Cane Sugar: 3,698
The Department operates the program at no cost to
taxpayers by avoiding forfeitures of sugar to CCC. The Act
shifts the responsibility of storing surplus production to
the domestic industry rather than the CCC. Should
forfeitures occur this summer, CCC reiterates its intention
to move these stocks back into the commercial market as
expeditiously as practicable. The FY 2005 OAQ allocations
to companies thus will be reduced by an amount equal to the
forfeited quantity.
FY 2004 Tariff-Rate Quota for Refined and Specialty Sugar
Increased
The FY 2004 refined sugar tariff-rate quota (TRQ) is
increased by 2,000 metric tons raw value (MTRV) (2,205
STRV), raising the total to 41,000 MTRV (45,195 STRV), for
which the sucrose content, by weight, in the dry state,
must have a polarimeter reading of 99.5 degrees or more.
The increase is designated entirely to the specialty sugar
TRQ and is needed to accommodate a rapidly expanding market
for organic sugar. This addition to the first three
completed tranches brings the total FY 2004 specialty sugar
TRQ to 20,656 MTRV (22,769 STRV).
This fourth and final tranche of 2,000 MTRV will open
on August 10, 2004, and will be reserved for organic sugar
and other specialty sugars not currently commercially
produced in the United States or reasonably available from
domestic sources.
FY 2005 Allowable Imports for Raw, Refined, and Specialty
Sugar Announced
The FY 2005 tariff rate quota for imports of raw cane
sugar into the United States is established at 1,117,195
MTRV (1,231,497 STRV). This is the minimal amount to which
the United States is committed under the World Trade
Organization (WTO) Uruguay Round Agreements. For all
countries other than those specifically noted below,
Certificates for Quota Eligibility (CQEs) corresponding to
each country�s allocation may be entered at the low-tier
tariff at any time during the fiscal year. CQEs will be
issued to allow Brazil, the Dominican Republic, and the
Philippines to ship up to 25 percent of each country�s
allocation at the low-tier tariff during each quarter of FY
2005. Argentina, Australia, Guatemala, and Peru will be
allowed to ship up to 50 percent of their initial
allocations in the first six months of FY 2005.
Allocations not entered with the U.S. Customs Service
during any quarter or six-month period may be entered
during the remainder of the year.
The FY 2005 refined sugar TRQ is established at
43,000 MTRV (47,399 STRV) for which the sucrose content, by
weight, in the dry state, must have a polarimeter reading
of 99.5 degrees or more. This amount includes 22,000 MTRV,
the minimum level to which the United States is committed
under the WTO Uruguay Round Agreements, and an additional
21,000 MTRV for specialty sugars. This additional 21,000
MTRV combined with a specialty sugar allocation of 1,656
MTRV included in the 22,000 MTRV WTO minimum refined sugar
level brings the total specialty sugar allocation to 22,656
MTRV (24,974 STRV).
USDA will administer the FY 2005 specialty sugar TRQ
in four tranches. Because this is a first-come, first-
served TRQ, tranches are needed to allow for orderly
marketing throughout the year. The first, totaling 1,656
tons raw value, will open October 26, 2004. All specialty
sugars are eligible for entry under this tranche. The next
three tranches will each be equal to 7,000 tons. The
second tranche will open on November 16, 2004; the third on
March 22, 2005; and the fourth on June 7, 2005. The
second, third and fourth tranches will be reserved for
organic sugar and other specialty sugars not currently
commercially produced in the United States or reasonably
available from domestic sources.
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