The U. S. Department of Agriculture has announced sugar program provisions for the remainder of fiscal 2006 and for fiscal 2007 concerning administration of the tariff rate quotas (TRQ’s) and the domestic allotment program.
Actions taken include:
• An increase in the fiscal 2006 refined sugar TRQ of 100,000 short tons raw value (STRV).
• An increase in the fiscal 2006 specialty sugar TRQ of 9,921 STRV.
• Establishing the fiscal 2007 raw sugar TRQ at 1,481,497 STRV, which is 250,000 STRV above the World Trade Organization (WTO) agreement required minimum of 1,231,497 STRV.
• Establishing the fiscal 2007 refined and specialty sugar TRQ at 62,832 STRV, 38,581 STRV above the WTO Agreement required minimum of 24,251 STRV.
• In accordance with the North American Free Trade Agreement (NAFTA), permitting duty-free entry of 275,578 STRV (250,000 metric tons) raw or refined Mexican sugar during fiscal 2007, and at least 192,904 STRV (175,000 metric tons) from October 1, 2007 through December 31, 2007.
• The fiscal 2006 Overall Allotment Quantity (OAQ) remains at 9,350,000 STRV and the fiscal 2007 OAQ is set at 8,750,000 STRV.
2007-08 Sugar Outlook
The July World Agriculture Supply and Demand Estimates (WASDE) Report indicates that total sugar production from 2006 crop sugar beets and sugarcane along with carry-in stocks will not be sufficient to meet domestic use requirements and provide for rebuilding ending stocks to reasonable levels. Additional imported sugar thus will be required, over and above the minimum WTO TRQ import quantities.
2007-2008 NAFTA Sugar
The United States has consulted with Mexico and the two parties have determined jointly, in accordance with NAFTA, that Mexico is projected to be a net surplus producer of sugar for the next marketing year (fiscal 2007). In accordance with this determination, USDA has announced that Mexico will be permitted to enter up to 275,578 STRV (250,000 metric tons) raw or refined sugar duty free in fiscal 2007.
The United States and Mexico have concluded an agreement under which:
• The United States will provide duty-free access to 250,000 metric tons of Mexican sugar during the next marketing year (fiscal 2007).
• Mexico will provide duty-free access to the Mexican market for an equivalent amount of U.S. high fructose corn syrup (HFCS) during the same period (Oct. 1, 2006 through Sept. 30, 2007).
• Effective Jan. 1, 2008, Mexico will not impose duties on U.S. HFCS.
• Mexico will establish a duty-free quota for U.S. sugar of not less than 7,258 metric tons (raw value) for each of marketing years 2006, 2007 and 2008. The over-quota tariff on U.S. sugar will be eliminated effective Jan. 1, 2008, as provided for in NAFTA.
• The United States will provide duty-free access of a minimum of 175,000 metric tons and, based on market conditions, up to 250,000 metric tons of Mexican sugar and Mexico will provide duty-free access to an equivalent amount of U.S. HFCS from Oct. 1, 2007, through Dec. 31, 2007.
• Mexico and the United States confirmed that on July 3, 2006, they submitted a joint letter to the WTO Dispute Settlement Body regarding the elimination of Mexico’s soft drink and distribution taxes.
For further information regarding the foreign program changes, contact Ron Lord, Foreign Agricultural Service at (202) 720-2916, and for domestic program changes, contact Dan Colacicco, Farm Service Agency at (202) 690-3451.