FROM: U.S. DEPARTMENT OF AGRICULTURE
USDA Announces Additional Actions to Address the Domestic Sugar Surplus
WASHINGTON, July 23, 2013 - The U.S. Department of Agriculture today announced that in order to continue to address the domestic sugar surplus at the least cost to the federal government, purchase invitations have been sent to domestic sugarcane processors soliciting bids to sell raw cane sugar to the Commodity Credit Corporation (CCC). The CCC will purchase sugar from domestic sugarcane processors under the Cost Reduction Options of the Food Security Act of 1985, and simultaneously exchange this sugar for credits offered by refiners holding licenses under the Refined Sugar Re-export Program.
USDA is taking this action based upon the success of similar actions last month which removed almost 300,000 metric tons of import supply in exchange for 91,000 metric tons of CCC inventory for a cost of $43 million, saving an estimated $66.9 million in avoided sugar forfeitures. Today's action is expected to remove an additional 136,000 metric tons of import supply of raw cane sugar at a cost of $18.7 million, reducing federal sugar program expenditures by an estimated $37.6 million, which would be incurred if the sugar were forfeited to CCC.
The invitation for the sugar purchase and exchange announced today will be administered similarly to the purchase announced on June 18, 2013.
The sugar purchase and exchange offer differs from the earlier action in that only sugarcane processors may offer to sell sugar to CCC because raw cane sugar poses the greatest risk of forfeitures at this time. This purchase offer also differs from the earlier purchase in that any sugar offered to CCC must be under CCC loan. The exchange invitation and selection process will be administered in the same way as the sugar action announced on June 18, 2013.
