WASHINGTON — The US Department of Agriculture announced in the March 7 Federal Register a 125,000-tonne raw cane sugar tariff-rate quota (TRQ) increase for the current marketing year. The increase comes on the heels of sugar users’ pleas widely expressed at the recent International Sweetener Colloquium for a TRQ increase to help offset high-duty imports needed to fill the gap left by a shortfall in Mexico’s sugar production and exports this year.

“These actions are being taken after a determination that additional supplies of raw cane sugar are required in the US market,” the USDA said.

The TRQ increase equals about 137,789 short tons, raw value, of sugar imports, 100% of which typically don’t reach US ports. In its Feb. 8 World Agricultural Supply and Demand Estimates (WASDE) report, the USDA forecast total (raw, refined and specialty sugars) 2023-24 TRQ sugar imports at 1,612,000 short tons, raw value. High-duty imports were forecast at a record-high 715,000 short tons. Imports from Mexico were forecast at 799,000 short tons, but many in the trade believe Mexico will not be able to meet that forecast due to drought-reduced production. Mexico also was forecast to import a record-high amount of high-duty sugar this year as it sought to maximize exports to the United States while also meeting domestic sugar needs. The TRQ increase will help offset the high-duty imports by the United States for the remainder of the marketing year (to Sept. 30, 2024). Typically, a TRQ increase would be offset by a decrease in imports from Mexico, but that likely will not be the case this year due to Mexico’s struggling sugar production. The USDA will update its US and Mexico sugar supply-and-demand forecasts in the March 8 WASDE report.

US refined sugar prices were at decade highs in 2023. Prices in 2024 and forward prices for 2025 have come down modestly from 2023 but remained historically high. Large volumes of high-duty imports also tend to support high refined sugar prices.

The Office of the US Trade Representative allocates the increase to qualified suppling countries shortly after the USDA announcement.

The USDA established the 2023-24 raw sugar TRQ on July 5, 2023, at 1,117,195 tonnes, the minimum US commitment under World Trade Organization agreements. The US secretary of agriculture has authority “pursuant to Additional US Note 5 to Chapter 17 of the US Harmonized Tariff Schedule” to modify the raw and refined sugar TRQs and can also increase the TRQ under sugar program guidelines in the farm bill when an emergency supply situation is declared. The Feb. 7 action fell under the Harmonized Tariff Schedule and was not the result of an emergency declaration under the sugar program guidelines.