More than 1500 sugar cookies baked with SteviaCane were the hit of the Institute of Food Technologists (IFT) food expo in Chicago.

Talk about a high-profile taste test – the Institute of Food Technologists’ (IFT) food expo. It’s where prototype products are sampled by thousands of food experts who turn out for the annual event.

More than 1,500 sugar cookies made with the new sweetener called “Steviacane™” – a product made from sugar and stevia – were served up there recently “raising some eyebrows and generating a lot of curiosity,” says Darrell L. Gerdes, manager of research and new product development for Imperial Sugar Company (ISC).

Sugar cookies served at Institute of Food Technologists (IFT) food expo were the receipt of Joetta Gerdes, mother of Darrell L. Gerdes, manager of research and new product development for Imperial.

With the introduction of Steviacane, Natural Sweet Ventures LLC  – a joint venture formed by Imperial Sugar and PureCircle this year – is tapping into consumers’ and food manufacturers’ desire for a natural sweetener that uses less sugar, but that doesn’t impact finished product flavor.

Representatives from both companies were there to see and hear firsthand reactions to the Steviacane  “sugar” cookies, which were based on a recipe by Gerdes’ mom, Joetta Gerdes.

“We saw a strong, positive reaction to the idea of having a sugar product that could help our customers lower sugar usage and calories in their existing products,” reports Gerdes, a Ph.D. with a taking-it-to-the-streets approach when it comes to engaging consumers.

Jordi Ferre, corporate vice president of sales and marketing for PureCircle USA, says those who tasted the cookies were pleasantly surprised. A common response was: “You don’t expect to have a great-tasting cookie after taking 50 percent of the sugar out.”

Steviacane is produced through a patented process in which cane sugar and high-purity stevia, a sweetener derived from the leaves of the Stevia plant, are combined into an easy-to-use granulated product.

According to Jason Hecker, vice president of global marketing for PureCircle Limited, stevia sweetener products are gaining momentum in the market as major multinational companies and big brands continue to drive up awareness.

“With increased interest in stevia-based products and a shift in the market to sugar, Steviacane comes along at the right time, combining the best of the two natural sweeteners,” says Hecker. “Steviacane will fill a real need, offering the taste of real sugar – but with fewer calories – using our proprietary formulation.”

Gerdes has been leading the development of the venture’s first product for the last six months. The process has required everything from an examination of stevia and sugar molecules, to running taste panels, to conducting a 72-hour commercial-scale test run of the product in the refinery.

“This is a significant step forward for the sweetener industry,” Gerdes believes. “This has been the most exciting and challenging product-development project I have been involved with in my 25-plus year food industry career. It was quite a treat to see the positive and supportive reactions of hundreds of food scientists at the food expo.”

Natural Sweet Ventures plans to do a limited-distribution test later this year that involves selling the packaged product in one of Imperial Sugar’s strategic retail partners.

Gerdes hints that conference attendees in various industries peripheral to food processing presented some unique opportunities going forward.

Ferre sums up his impressions, saying: “Widespread interest in using a natural sweetener like stevia with sugar to reduce calories continues to be very big. Steviacane offers a perfect solution.”

The state Department of Environmental Conservation wants to modify American Sugar Refining’s permit for its plant at 1 Federal St. on Yonker’s southwestern shore.

The company processes raw sugar into consumer products under the Domino brand and draws its cooling water from the Hudson River, into which it returns the used water.

Wastewater from the sugar plant is sent to the county’s treatment plant to the south.

The DEC wants the refinery to do a study to determine the plant’s impact on the river’s fish; monitor its stormwater runoff; and adopt a best management practices plan.

When Kevin Jeffries, Imperial Sugar Company’s corporate safety systems manager, recently spoke about “the science of dust explosions” during Customer Safety Day, he began with a fundamental truth not everyone knows: Under the right conditions, most finely ground organic materials, when dispersed in air, can ignite and lead to an explosion.

“I wanted to bring everyone’s level of awareness up,” Jeffries says. “Since our customers are often handling not just sugar, but flour, cornstarch and other material, my goal was to help them understand the potential hazards and how certain factors relate to their specific operation.”

The potential hazard can be best understood by examining what Jeffries calls the “pentagon of combustible dust.”

Kevin Jeffries, Imperial Sugar Company’s corporate safety systems manager, speaks about “the science of dust explosions” beginning with a fundamental truth not everyone knows: Under the right conditions, most finely ground organic materials, when dispersed in air, can ignite and lead to an explosion.

“A source of ignition, fuel (the dust), oxygen, confinement and dispersion – you’ve got to have all five of these things before you can have a dust explosion,” he says.

While a dust fire occurs when combustible dust is exposed to heat in the presence of air, a dust explosion requires the simultaneous presence of two additional elements – dust suspension and confinement. Suspended dust burns more rapidly and confinement allows for pressure buildup.

Removal of either the suspension or the confinement elements prevents an explosion, although a fire may still occur.

“An explosion happens quickly, think milliseconds … the event often occurs inside equipment – silos, granulators, bucket elevators, enclosed conveyor belts or powder mills,” he added. “Dust accumulations on rafters, beams and building steel can also be a concern.’’

A combustible dust is, technically, “any finely divided solid material that is 420 microns or smaller in diameter,” according to the National Fire Protection Association (NFPA). How dense that dust is will control how combustible it is. Engineers measure the Minimum Explosible Concentration (MEC) inside process equipment – such as conveyors and silos – to see whether the amount of dust dispersed in air is concentrated enough to spread an explosion.

For example, explains Jeffries, with an MEC concentration of coal dust in the air, a 25-watt light bulb six feet away from you would not be visible.

To gauge the likelihood of explosion and the potential intensity of an explosion, engineers also can measure Minimum Ignition Energy (how much energy is required to ignite a dust cloud), Minimum Ignition Temperature (the temperature that will ignite a dust cloud), Kst (the maximum rate of pressure rise) and Pmax (the maximum explosion pressure).

Engineers use some of these calculations, such as Kst and Pmax, to design venting or isolation systems that prevent explosions.

“No one wants an explosion to happen,” he says. “But the best guidelines and standards tell us to design pressure-release or isolation systems, and to design walls that absorb and deflect energy generated by a blast.”

Jeffries emphasizes that no one wants an explosion.

As guests on Customer Safety Day – almost all of whom had engineering or other technical backgrounds – toured the refinery with Jeffries, many had questions about dust-collection systems and other state-of-the-art techniques now in place at the Port Wentworth refinery. Even among engineers, Jeffries says, many people “just don’t fully understand the qualities of combustible dust.”

The consensus standards published by the NFPA aren’t easily found and aren’t widely known within the industry, though they have been around for decades. Adding to the knowledge gap is the fact that different states have different fire codes, and inspectors may have different levels of experience. That’s one reason OSHA recently re-started its National Emphasis Program on combustible dust to allow for more education, outreach and inspection.

Jeffries says helping Imperial Sugar’s customers be more aware of prevention tactics was a primary goal of his “science of dust explosions” presentation. The company’s management and engineering team has gained extensive knowledge from the process-safety experts at Chilworth Technology Group, which was brought in as consultants for the rebuilding of the Port Wentworth refinery.

“If we can give that information to a customer in an eight-hour segment, so he can make a determination for his own facility, then we’ve done our job. We don’t want to be one of those companies that hordes information. We want to share what we know with others.”

Week-long festivities officially began June 7 when the Dublin city limits signs were temporarily changed to Dr Pepper, Texas.

According to Bob Fleenor, regional sales manager for Imperial Sugar Company’s industrial division, ISC has a relationship with The Dublin Dr Pepper Bottling Company that goes back generations. He says Dublin Dr. Pepper continues the longstanding tradition of using Imperial’s pure can sugar as a primary ingredient, leading the way for other bottlers that are returning to sugar as their beverage sweetener of choice.

On June 12, the main day of the celebration, Imperial Sugar will be hosting a tent where visitors can decorate sugar cookies with the company’s new line of Baker’s Supreme Premium Frosting Mixes.

Dr Pepper was first concocted by a pharmacist working at Wade Morrison’s Old Corner Drug Store in Waco, Texas, around 1885. The drink was named after the father of a girl Morrison had loved back in his home state of Virginia. A bottling company was formed later in 1891, and the soft drink was picked up by an existing bottler in Dublin, Texas, located 80 miles to the west. Dr Pepper made its global debut at the 1904 World’s Fair in St. Louis.

More information on the celebration, which is open to the public, can be found at the company’s website.

Brian Harrison (center) with members of the S.I.T. executive committee. (Left to right) Stephen Clarke, Florida Cystals; Ahmed Vawda, United Sugar Co. and incoming S.I.T. President; Harrison; Dave Demone, American Sugar; and, Paivi Paakkarinen, FinnSugar Ltd.

The Crystal Award is presented to individuals who have contributed notably to the technological advancement of the sugar refining industry.

During his 32-year career in the sugar industry – much of it at Imperial Sugar Company – Harrison has served as vice president of refinery operations, VP of operations development and VP of operations. In the professional community, Harrison has authored or co-authored five technical papers for S.I.T. annual meetings and has served as the organization’s president.

Harrison credits his late father Joe Harrison for exposing him to the world of sugar technology. His father also received S.I.T.’s Crystal Award nearly 20 years ago.

A few days before Harrison received the award, he was honored on a different level – he became a grandfather for the first time. His daughter gave birth to a girl.

Harrison and his wife Connie live in Louisiana.

The 2010 Sugar Industry Technologists (S.I.T.) Conference meeting in Savannah, Ga., wrapped up its sessions with a VIP tour of Imperial Sugar Company’s large, modern cane sugar refinery in nearby Port Wentworth.

S.I.T. members tour Imperial Sugar's production areas with Brian Harrison, VP for Sugar Technology.

S.I.T. was founded nearly 70 years ago as an exchange of scientific and technical information about sugar refining.

The conference group, numbering nearly 200, were all outfitted with steel-toed footwear, hard hats, special protective eyewear and earplugs … much the same garb required for all Imperial Sugar workers … before entering the newly rebuilt sugar production, packaging and warehouse areas.

The tour was hosted by numerous Imperial Sugar associates, including Vice President Brian Harrison, featured close-up look at Imperial Sugar’s high tech and automated sugar packaging and handling systems in operation, made by companies in the U.S., Germany and New Zealand.

Harrison was presented with the S.I.T.’s Crystal Award 2010 for outstanding achievement in sugar technology, a distinction awarded to his father nearly 20 years ago.

In his keynote address at the opening session of the 2010 Sugar Industry Technologists conference meeting in Savannah, Imperial Sugar Company President and CEO John C. Sheptor issued a call for immediate action within the sugar industry worldwide to create the highest degree of safety standards and to share all safety data among companies.

2010 S.I.T. Conference in Savannah, Ga.

Sheptor called for national and international combustible dust standards in the handling of sugar during all steps in the process, from shipping to manufacturing, and proposed an international laboratory facility to set best practices for collection of data in the sugar industry.

He asked S.I.T. or Sugar Industry Technologists, Inc., to create a permanent safety committee within the organization to oversee development of standards that exceed those imposed by any government or regulatory agency.

Sheptor told the record audience of nearly 200 participants that the safety of workers in the handling and processing of sugar is paramount and ahead of other corporate agendas.

Follow S.I.T. online.

To ensure Imperial Sugar's high quality, Elton Brady collects samples of liquid sugar at the Port Wentworth refinery liquid sugar loading dock.

There’s no getting around the fact that high-fructose corn syrup is experiencing a slow downward spiral.

Sales of high-fructose corn syrup have fallen in the United States by 9 percent in 2009, compared with 2007, according to an analyst at Credit Suisse — with more of a drop expected this year. More than half of all Americans say they are concerned that high fructose may pose a health hazard. And a New York legislator has proposed banning the sale of foods containing the product in that state’s restaurants and stores.

As a result, Imperial Sugar Company has seen an uptick in its sale of liquid sugar to food-manufacturing customers, says Paul Whitaker, vice president of sales.

A centuries-old, natural ingredient, pure cane sugar appeals to manufacturers trying to strip down and simplify their products’ ingredient labels. And because it’s in an aqueous form, liquid sugar works well with the same systems and processes food manufacturers use for handling high-fructose corn system.

PPaul Whitake, vice president of sales for Imperial Sugar.

“Liquid sugar is the form that our customers like to work with, because it runs through their plant. So more and more of the largest food manufacturers in the country are converting from high fructose back to sugar,” says Whitaker.

One can see the trend playing out on the ingredient labels of yogurt, ice cream, beverages and cereals. And one can see it in Imperial’s sales reports: For the second fiscal quarter of 2010, the company saw growth of 30 percent in liquid sugar sales, compared to previous years.

All of Imperial Sugar Company’s plants currently make liquid sugar — which is essentially a simple syrup. Most production comes out of Port Wentworth, where workers produce 18 truckloads of liquid sugar a day. Gramercy produces approximately eight truckloads per day. And a liquid station in Ludlow, Ky., produces four truckloads of very low-color liquid sugar per day, primarily destined for distilleries and spirit companies.

Transporting the liquid sugar samples to the lab by bicycle is a fast way.

In addition, Imperial has struck up partnerships with several third-party liquid sugar stations to handle additional production for the company. In total, including third-party stations, Imperial produces two million pounds of liquid sugar per day.

The third-party stations bring logistical strength to the business. Whitaker explains, “Where there’s a high concentration of industrial customers, we set up liquid stations. We ship bulk sugar to those stations by rail car. Then they melt it, pasteurize it and ship it by truck to customers for us.” One rail car of bulk sugar yields five truckloads of liquid sugar.

The benefit of locating liquid stations near its large customers is that Imperial can expedite delivery.

“Liquid sugar has a short shelf life,” explains Whitaker. “Most of our industrial customers want to use it in their finished products within two days. For example, one of our stations that supplies a big Kellogg’s manufacturing plant typically delivers 15 truckloads of liquid sugar per day. We have to be on call 24/7 for them. When they’re running Frosted Flakes, they need their liquid sugar.”

It’s also cost-effective: Liquid sugar is heavier and bulkier than granulated sugar. So cutting the distance between producer and customer keeps shipping costs down.

“Liquid sugar is important to the company as more high-fructose users convert over,” says Whitaker. “Sales have been tremendous, and we see huge opportunities as more customers reformulate their products.”

Higher beet sugar production reflects a return to trend yields, while cane sugar production is increased for Florida and Texas. Imports under the tariff rate quota (TRQ) reflect the minimum of U.S. commitments to import raw and refined sugar and projected shortfall. The Secretary of Agriculture will establish the actual level of the TRQ at a later date. Imports from Mexico are nearly unchanged. Total sugar usage is unchanged.

Mexico’s 2010/11 sugar supply is up 1.7 percent with higher stocks and production more than offsetting lower imports. Production is projected to increase, as yields rebound to trend levels. Imports reflect mainly U.S. exports. Domestic sugar consumption is down slightly, due to higher use of corn-based sweeteners, and exports are up slightly. Ending stocks increased moderately.

For 2009/10 U.S. sugar, increased supplies nearly offset increased use, compared with a month earlier. Imports are increased under the TRQ and due to expectations for increased high-duty imports. Sugar deliveries are increased to reflect the recent strong pace to date.

WASDE, the World Agricultural Supply and Demand Estimates report, provides USDA’s comprehensive forecasts of supply and demand for major U.S. and global crops and U.S. livestock.

The First Annual Sugar Association Outlook Day held in Washington, D.C. for association members.

Government and industry statistics are confirming a growing preference in the United States for pure sugar in foods and beverages rather than other man-made and high intensity artificial sweeteners.

Sugar Association President and CEO Andy Briscoe and Imperial Sugar President and CEO John Sheptor.

At the First Annual Sugar Association Outlook Day held in Washington for association members – a gathering of top sugar and food industry executives – Stephen Haley of the USDA Economic Research Service said that while demand for sugar increases, the amount of sugar imported from Mexico growers has doubled since 2008 (693,934 tons), increasing to 1.4 million tons imported into the U.S in 2009.

Sugar producers in Mexico are taking advantage of higher sugar prices in the U.S., driven by heightened consumer awareness about nutrition and health and concern about the proliferation of artificial sweeteners. At the same time, Haley reports increased high fructose corn syrup being exported to Mexico.

Robb MacKie, President and CEO of the American Bakers Association, said 2010 is all about nutrition – dietary guidelines, child nutrition and increased awareness about obesity, an issue driven by First Lady Michelle Obama. MacKie’s member bakers account for approximately 42 percent of all industrial sugar used in the U.S in 2009.

Robb MacKie, President and CEO of the American Bakers Association.

MacKie said one challenge to his industry is consumer and government confusion over what’s healthy to eat, and he urged clarity for dietary guidelines, backed up by more updated better scientific research. MacKie advocates being engaged in the current debate over improved nutrition in the U.S. food and beverage industry, and he calls for better nutrition labeling.

Sugar Association – led by President and CEO Andy Briscoe – represents America’s sugar industry in Washington and promotes the consumption of sugar as part of a balanced diet and healthy lifestyle through the use of sound science and research.

Other industry leaders participating in the one-day conference included John Sheptor, President and CEO of Imperial Sugar Company; Brian O’Malley, President and CEO of Domino Foods; Jim Simon, General Manager of American Sugar Cane League; and, Mark Flagenheimer, President and CEO of Michigan Sugar Company, along with 30 additional sugar industry executives.

Among the presenters was Patrick Henneberry, senior vice president and chief of commodities management for Imperial Sugar Company. Speaking remotely from Imperial Sugar headquarters in Sugar Land, Texas, he discussed sugar trade between the U.S. and Mexico, U.S. sugar demand trends, and the current state of U.S. GMO sugar beet production.

Pat Henneberry, Imperial Sugar Company

According to Henneberry, sugar trade between the United States and Mexico didn’t kick in until it was forced to by Hurricane Katrina in the summer of 2005. The resulting crop damage drove up prices and drew 866,000 tons of sugar imports from Mexico in 2005/2006. Imports increased again to 1.3 million in January 2008, when tariffs on sugar were eliminated through NAFTA (North American Free Trade Agreement).

“The market really connected between the U.S. and Mexico because of necessity more than a result of the treaty,” said Henneberry. “The treaty came into effect on January 1 and our refinery in Georgia exploded on February 7. Over the next 18 months we imported an awful lot of sugar from Mexico.”

Henneberry pointed out the two countries suffered all of the normal integration issues faced by markets trading together for the first time.

One such issue is that sugar must be repacked before it can be sold easily in either market. Sugar in the U.S. is sold to industrial customers in bulk railcars, bulk or liquid trucks, and in 50- and 25-pound paper bags. In Mexico, sugar largely is sold in 50-kilo poly bags (110 pounds), 1-ton totes and some via liquid trucks.

Most U.S. firms won’t allow a bag weighing over 50 pounds on their property because of the associated injuries and Workers Compensation Insurance policies.

So how do you get a 110-pound bag of sugar into the U.S.?

A mini-industry has sprung up around sugar transfer stations. There, 1-ton totes and 50-kilo poly bags are opened and the sugar is fed into a machine that loads a railcar. The sugar is then brought into the U.S. and either used directly by customers or made into liquid sugar.

“Part of the problem we’ve run into is if you don’t open the bags carefully, you can generate some poly fibers that end up in the sugar,” said Henneberry. “And for that reason, a lot of it goes through liquid facilities, where we filter out any fibers and clean up the sugar.”

There’s also the issue of quality and food safety. One plant or product may be in compliance with food safety laws in Mexico but not in the U.S. Henneberry said that getting companies to go down and inspect sugar producers and their facilities in Mexico is a fairly new process, but factories are being visited and making any necessary changes to get approved.

In late 2007, Imperial Sugar formed a joint venture based in Monterrey, Mexico, to help move sugar back and forth across the border. The company, Comercializadora Santos Imperial, now serves more than 100 customers on both sides of the border with Mexican origin sugar.

Both the U.S. and Mexico have tight supply/demand balances for sugar this year.

Henneberry painted a multi-faceted picture of trends affecting demand in the U.S., that for the most part, contribute to sugar demand growth.

Sugar has been gaining share relative to high fructose corn syrup (HFCS) – a trend Henneberry believes is based on consumer preference. Ocean Spray, Snapple and Jones Soda have removed HFCS from their products and replaced it with real sugar. Pepsi is doing test markets with its sugar-based Pepsi Throwback and Mountain Dew Throwback, and there’s sugar-based Heritage Dr. Pepper.

Another – perhaps longer-term – trend is the reduction of sugar in some cereals and beverages. General Mills announced it would reduce the amount of sugar in Coco Puffs by 25 percent, and Pepsi announced it would reduce sugar in its products by 25 percent over a period of 10 years.

“For now, we’re still seeing sugar demand growth,” Henneberry said. “We haven’t seen the full impact of some manufacturers’ plans to reduce the overall sugar content of their products.”

Henneberry closed his presentation with an update on GMO sugar beet production.

GMO Sugar beets have been grown in the U.S. only since 2008 and have attained a near total market share against traditional seed stock. Yet fears of cross pollination and accidental dissemination of GMO beets have led to a study on the environmental impact of this crop.

According to a current court ruling, GMO seed may be planted for the production of sugar but not for seed. That could change when a final ruling is made in the summer. In the meantime, sugar from GMO beets continues to be sold.

Summing it up, Henneberry said: “Worldwide sugar supply has been very tight this year. Sugar prices went up to just over 30 cents a pound in the March contract and now they’re back down to 17 to 18 cents.

“India’s production is up from their earlier expectations, but they still need to import about 5 million tons of sugar to meet their own demand. The thought is that next year they’ll produce a surplus. Brazilian production is being estimated higher, but it is difficult at this early stage to know with any certainty what the crop will yield.”

F. O. Licht, part of Agra Informa, monitors the global soft commodities markets. It reports regularly on sugar, coffee, tea, molasses, ethanol and biofuels.

The recent changes are based upon consultations with quota-holding nations over the last several months. Several nations who could not ship, surrendered quota quantities for the current 2010 fiscal year, which was in turn allocated to other quota-holding nations.

Resulting in a wash, the total reallocation amounted to 81,945 metric tons (2,204.6 pounds = one metric ton). The table below shows the quantity of sugar that was surrendered and the countries who received additional rights to ship to the U.S. under quota.

“While this quantity of sugar may lead to more imports eventually, the quantities allocated to many nations are too small to economically ship to the U.S. at this time,” said Patrick Henneberry, senior vice president and chief of commodities management for Imperial Sugar Company.

“Brazil, the Philippines and the Dominican Republic received enough sugar to ship independently. Others will have to wait for additional allocations or co-ship with sugar from other nations to take advantage of these allocations.”

Patrick Henneberry, senior vice president and chief of commodities management for Imperial Sugar Company

The TRQ establishes a quantity of sugar from each of the countries named to be imported into the U.S., assessing either no duty or only a small duty. For quantities above the TRQ allocations, importers must pay a duty of $15.36 per pound to secure entry. Ordinarily, the over-quota duty makes imports twice the price of U.S. sugar. The new allocations, however, will not result in over-quota duties.

More relief still might be on the way. In the 2008 Farm Bill, Congress ruled that USDA should not increase the quota until after April 1st unless there was a declaration of disaster. It is expected that USDA will act soon after the April 1 deadline to increase the quota.

According to Henneberry, just how much sugar is added will be crucial for the marketplace, as many industry analysts – as well as Imperial – believe significantly more sugar will be needed than USDA estimates would indicate.

“Given the USDA lags the industry estimates, it is likely it will add sugar slowly over time, gauging the effect on supply and demand,” Henneberry said. “If the industry analysts are correct, this behavior will lead to a tight market in the U.S. for the rest of the year.”

Excerpt from the cover story of the NFPA Journal, March/April 2010:

As part of its goal to create a new, state-of-the-art refinery following a catastrophic explosion and fire in 2008, Imperial Sugar turned to Ron Allen to help it devise and implement safety features in all of its facilities.

As Allen will tell you, installing the right equipment is easy. The tough part is making sure workers put safety first, day after day.

To make sure his co-workers at Imperial Sugar get the message on dust safety, says Ron Allen, it helps to think like a dance instructor.

Click here for the full NFPA Journal story.

(Used by permission of NFPA Journal)

The USDA has released the March World Agricultural Supply Demand Estimates (WASDE), which include estimates of the supply and demand of many grains and other commodities produced in the U.S. The estimates for sugar were changed in only minor ways.

Pat Henneberry, Senior Vice President and Chief of Commodities Management for Imperial Sugar Company.

For 2009/2010, the USDA reduced the estimate of raw cane sugar production in Texas from 170,000 tons to 140,000 tons. On the demand side, the USDA reduced the estimate of sugar usage in products containing sugar and polyhydric alcohol by 50,000 tons. All other estimates remain unchanged.

The USDA made more changes in the estimates of the 2009/2010 Mexican sugar balance. It reduced the estimate of the Mexican sugar crop by 200,000 tons to 4.9 million tons raw value, in line with current reports of lower production to date. The estimate of demand was reduced by 300,000 tons and estimated imports were increased by 270,000 tons.

The USDA pointed out that high fructose corn syrup imports in the fourth calendar quarter of 2009 were 208,000 tons versus 297,000 tons of imports for the entire Oct. 2008/Sept. 2009 fiscal year. This considerably loosens the expected Mexican supply/demand situation for sugar in the current year and points out the expectation of continued imports being allowed into Mexico.

“The overall sugar situation remains tight in the U.S., and market participants await USDA action to increase the import quota in April,” said Pat Henneberry, Senior Vice President and Chief of Commodities Management for Imperial Sugar Company.

According to Henneberry, the USDA has said it faced considerable uncertainty in dealing with sugar imports in the current year. Uncertainty over how much sugar will enter the U.S. from Mexico – and large differences in the estimates of demand between the USDA and those in the industry – make it difficult for the USDA to know with certainty how much sugar they need to add to the system. This uncertainty will likely lead to several smaller increases through the remainder of the year rather than a single larger action during the first half.

“We believe such a strategy will lead to continued tightness in the U.S. market for sugar for the balance of the fiscal year,” said Hennebery. “Despite a savage decline in world market prices in the last couple of weeks, that market remains tight and the supply demand tightness seems unlikely to be decreased during this calendar year. The best most analysts expect is keeping the current shortfall constant.”

Henneberry went on to say the supply availability of sugar for the U.S. raw sugar import quota for 2010/2011 beginning this fall will likely be tight, with many countries unlikely to have sugar available until the beginning of their new crops in the November/December timeframe. “This situation has the potential to leave the U.S. short of raw sugar in the beginning of the next fiscal year.”

The 2008/2009 estimates for sugar were left unchanged in this month’s WASDE report.