A recent letter from some of the biggest food companies warned Secretary of Agriculture Vilasck that the U.S. could run out of sugar, and the companies might be forced to raise the prices of products if the Obama Administration did not allow them to import more tariff-free sugar. To view the article by Scott Kilman, Carolyn Cui and Ilan Brat in the Wall Street Journal, click here. Some in the industry are calling to be able to import 450,000 tons of tariff-free sugar by the end of September. This is just the latest in a long dispute between the food companies and the American sugar industry over the federal sugar policy.
According to the article,
“The issue is coming to a boil again because sugar prices, both in the U.S. and globally, have soared to unusually high levels for more than a year and show little sign of easing any time soon. Prices of sugar futures contracts have risen 95% so far this year, hitting a 28-year high in recent days. On Wednesday, raw-sugar futures jumped 4.8% to 22.97 cents a pound at the Intercontinental Exchange.”The soaring prices is blamed on countries diverting large portions of their sugar cane crops to making biofuels. In Brazil, the world’s largest sugar producer, half of it’s “sugar-cane crop is processed into ethanol while about one-third of the U.S. corn crop is made into the alternative fuel.”
It is unclear currently if the Administration will increase the tariff-free sugar quota. Earlier
“Agriculture Undersecretary Jim Miller told a sugar-industry gathering in Utah that he wouldn't rule out a quota increase in the future. However, such a move would probably be politically unpopular among sugar farmers, who have a big voice in Washington through Rep. Collin Peterson, the Minnesota Democrat who is chairman of the House Agriculture Committee. Mr. Peterson, whose district is home to many sugar-beet growers, couldn't immediately be reached for comment Wednesday.”To view the letter sent by the industry, click here.
Posted: 08/13/09
