Sweet crisis averted: US increases refined sugar quota imported from Mexico

By Gill Hyslop contact

- Last updated on GMT

The baking industry is one of America's biggest sugar users. Pic: GettyImages/belchonack
The baking industry is one of America's biggest sugar users. Pic: GettyImages/belchonack

Related tags: Usda, American bakers association, Sugar

The American baking industry will not experience a sugar shortage – despite severe weather conditions that have battered the country’s sugar-producing regions – as the US Department of Commerce has increased the quota of imported refined sugar from Mexico.

According to the US Department of Agriculture (USDA), the quantity of Mexican refined sugar has been increased by 100,000 short tons to account for the decreased domestic production.

The short ton is a mass measurement unit used in the US, equal to 2,000 pounds or 907.18474 kg. A The British ton is known as the long ton, which is 2,240 pounds.

The USDA’s World Agricultural Supply and Demand Estimates Report from November 8 noted that US sugar production is expected to be 572,000 tons lower than previously expected.

It added that ‘ongoing weather concerns threaten further reductions.’

In Minnesota and North Dakota, for example, nearly a third of the beet crop was frozen into the fields where it has been left to rot, after a wet October delayed the harvest. Minnesota – the largest beet-growing state – and North Dakota – No. 3 behind Idaho – account for around 60% of US sugar beet production.

The scenario is identical in Canada, with the Alberta Sugar Beet Growers association reporting that severe snow and frost has damaged 45% of the region’s beet crop, making it the worst harvest in decades. Alberta is home to the only sugar beet processing plant in Canada.

Timely action is critical

In a letter sent to USDA Secretary Sonny Perdue yesterday, the American Bakers Association (ABA) urged him to’ utilise his authority and flexibility’ to increase the Tariff Rate Quota (TRQ) for sugar imports.

According to the ABA, a sugar shortage would have dire consequences for the sector, which generates more than $153bn in economic activity annually and employs more than 799,500 highly skilled people.

“As one of the top sugar using industries, increasing the sugar TRQ allotment is critical to the wholesale baking industry, specifically bakers,” ​said Lee Sanders, ABA’s senior VP of Government Relations and Public Affairs.

“Large, and especially smaller family bakers need immediate access to refined sugar. They do not have the ability to freely seek out alternative supplies abroad.”

The association confirmed the 100,000 short tons will be adequate for the industry’s short-term needs while the USDA continues to monitor the market’s sugar stocks.

The ABA has also requested that the USDA release any remaining blocked stocks that co-ops have stored and provide leadership on transportation logistics to get stocks swiftly to the end users.

‘ABA believes that this combination of actions will help restore stability to the sugar market and assist industrial sugar users across the country,’ ​wrote Sanders and Robb MacKie, president and CEO of ABA.

According to the USDA, the increased quota is consistent the Commerce Department’s Agreement Suspending the Countervailing Duty Investigation on Sugar From Mexico, and will not change the total amount of total sugar imports from Mexico, just the mix between refined and other sugar.

Related topics: Processing & Packaging, Cocoa & Sugar