US to import more sugar

The United States agriculture department yesterday finally served notice that it will import 250,000 short tons of refined sugar and 250,000 more of raw sugar to meet domestic market needs "in this highly unusual year."

Neither the beet or cane sector has enough supply to meet these new allotments. Thus, the shortfalls are reassigned to imports as required by statute, USDA said. In short, for this year, beet sugar supply is 242,000 STRV less than the new allotment.

Domestic sugarcane processors, on the other hand, was reported to have an estimated shortfall of 250,000 short tons for reassignment to imports.

The Sugar Trade representative of the US, surprisingly according to the report, will consult with countries to determine refined sugar availability.

In addition, the USTR will also survey all countries which will receive raw sugar allocations. And not only that, they will reassign the allocation from those countries which stated that they cannot fill their FY 2006 raw sugar TRQ.

And the notice stated that to ensure the additional quantity allotted, they must enter the United States by July 1, 2006.

Apparently the USDA adopted these in response to the continuing tight sugar market resulting largely from the disastrous weather event - the three hurricanes that devastated the sugar-producing areas of Louisiana, Mississippi and Florida last year as well as Mexico and Cuba.

How much will it cost to import tariff free sugar? The Sugar Regulatory Administration reportedly authorized the importation of 50,000 metric tons before July this year.

Based on the current market value, if the imports come from Thailand, the landed cost will approximate P1,600 per Lkg. for refined sugar. Or translated into raw, that is equivalent to only about P1,300, on par with the prevailing domestic prices.

The world sugar market, however, remains volatile. As of yesterday, spot prices of the commodity reached. Because of the announced importation, US market No. 14 quoted sugar at 24.80 cents per pound. The world market, however, rose by .15 cents to 19.30 cents per Lkg.

Incidentally, a large part of the surge in sugar prices is due to the massive shift to ethanol by Brazil, the largest producer of sugar.

Brazil's agriculture ministry project ethanol output to grow to 36.8 billion liters by 2015, with 28.4 billion consumed locally and 8.5 billion for export.

This year, Brazil expects to export 2.5 billion liters. Last year, it was pointed out, 54 percent of cars sold in Brazil were flex-fuel vehicles. This is versus the 21.6 percent in 2004.

A surprise development yesterday was the announcement that Pakistan will import 50,000 tons of sugar from India through the Wagah Border.

In short, everybody seems to be frantically trying to ease local shortages as more countries shift their sugarcane stocks to ethanol.

The sugar farmers who are the happiest with the turn of events are the 5,000 sugarcane growers of the subcontinent who are now enjoying a bonanza.

Sugarcane farmers of Australian have been the value of their land rise, because sugar is now part of the globe's energy resources.

And in the United States, President George Bush recently said he wants to spend an additional $59 million next year for research into using wood chips and other forms of cellulose to produce ethanol.

The energy bill the President signed into law last summer mandates the use of 7.5 billion gallons of ethanol each year by 2012. Corn remains the dominant production crop for ethanol.

In short, we remain behind the massive global shift to ethanol. Until now, Congress especially the Senate, still has to enact into law the National BioEthanol Program which the lower House had already approved.

And, as pointed out by some investors, they are just waiting for the measure to become law before they finally put their money into ethanol.

Well, we may wake one of these days having lost billions because of procrastination.

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There is the other side of the global sugar market. This is the suspicion that Brazil is selling genetically modified material for sugar.

In short, the development of transgenic cane will likely determine whether Brazil or Australia dominates the world sugar trading.

The Australians found themselves confronted by strong opposition in their country when it was revealed that Genetic Manipulation Advisory Committee had approved field trails of sugarcane into which jellyfish genes had been transferred.

Sugar manufacturers assured that they could not sell the GM product should it ever come to market.

Now, that is something which can have unexpected results later.

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The PNP regional director of Central Visayas should immediately investigate and come out with his findings on the alleged mauling of seven National Bureau of Investigation Agents by the Pamplona police.

NBI Bacolod head Philip Pecache should also not waste time in filing the necessary charges against the policemen involved in the beating up, hogteing and assault on the NBI team. Especially, since it is claimed they had, prior to their trip to Pamplona Gold and Country Club, coordinated with the Pamplona police chief.

This is something that should not be tolerated.*

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