USDA Responds to Tight U.S. Raw Sugar Market

Perspective from Frank Jenkins, Jenkins Sugar Group -

The USDA has announced that sugar entering the United States under the fiscal year 2011 raw sugar import tariff-rate quota will be permitted to enter U.S. Customs territory beginning September 1, 2010, a month earlier than the usual first entry date of October 1.

Additionally, the Department announced that sugar entering the United States under the U.S. fiscal year 2010 raw sugar TRQ will be permitted to enter U.S. Customs territory until October 31, 2010, a month later than the usual last entry date.

These actions are in response to increased tightness in the U.S. raw sugar market. This announcement does not change the level of any U.S. sugar import TRQs, and will apply only to raw cane sugar (not refined sugar).

While the move is textbook robbing Peter to pay Paul, and any will tighten the February-April period to the same extent that it eases nearby tightness, it will likely provide limited relief to the September/October cusp and will undoubtedly help traders delivering cargoes of sugar carrying both 2009-10 and 2010-11 raws.

Used with permission of Frank Jenkins.