The USDA’s decision to open the tightly-controlled U.S. sugar market to more foreign sugar comes as a relief for bakers and food manufacturers as consumer demand for their products spikes in grocery stores across the country during the coronavirus pandemic.
On Friday, USDA will officially publish in the Federal Register its decision to nearly double its 2020 tariff rate quota for refined sugar by allowing in an additional 181,437 metric tons of imports. The TRQ for raw sugar is being raised by 317,515 metric tons.
The TRQ increases “will be enormously helpful,” said Robb MacKie, president and CEO of the American Bakers Association. “We’re very, very appreciative.”
ABA’s members have been doubling and even tripling production to meet recent demand spikes as shoppers stock up on hot dog and hamburger buns, MacKie told Agri-Pulse. “It was already tight and the use ratio on bakers has gone up three times for commercial product. That’s putting some strain on the system.”
Bakers, food manufacturers and confectioners were concerned about the supply of sugar even before the coronavirus outbreak because of reduced crop size, but the pandemic has accelerated the situation, says Rick Pasco, president of the Sweetener Users Association.
The large increase for refined sugar that can go directly to bakers and food companies without first being refined is a testament to the immediacy of the need, Pasco told Agri-Pulse.
“We can’t wait months until we can process all this sugar,” he said.
Sugar is the third most important commodity for baked goods behind flour and water, so the lack of the sweetener on the domestic market, together with decreased sugar beet and sugar cane production, spurred sugar-users to make new appeals last week to USDA.
The result was even more access to sugar than what was asked for, MacKie said.
“They surprised us on the upside and we’re very pleased because they’re thinking ahead.
The amount of the TRQ increase also took the American Sugar Alliance by surprise, said spokesman Phillip Hayes.
“In designing U.S. sugar policy, Congress wisely provided the Department with an assortment of tools, including an opportunity to increase supplies after conducting a mid-year review of supply and needs,” the group said in a statement. “We are somewhat surprised USDA would increase imports by this amount, but we are optimistic that USDA has a strong sense of actual import outcomes and that the U.S. market will be adequately supplied but not oversupplied.”
Still, the Sweetener Users Association says it won’t be enough.
“We commend USDA for its actions and also appreciate that it is going to continue to watch the market, because we think further TRQ increases are likely to be needed,” the group said in a statement provided to Agri-Pulse.
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