Kamelua, Hawaii, Aug 6 - The United States is allowing imports of 300,000 tons of white sugar because of a supply shortage after a refinery fire and explosion in February, a senior official said Wednesday.
"The decision was made due to significantly reduced refining capacity," Mark Keenum, U.S. Agriculture Department undersecretary for farm and foreign agricultural services, told the annual meeting of the industry group American Sugar Alliance here via satellite hookup.
The decision drew immediate criticism from the ASA.
"The USDA's actions today cast a cloud over a sugar industry that has been dealing with depressed prices and soaring input costs for some time. Today's announcement is a reaction to a USDA forecast of what the sugar market will look like 14 months from now, and the USDA's estimates swing wildly from month to month," the ASA statement said.
Keenum said the imports were necessary because of the fire and explosion at the Imperial Sugar refinery in Port Wentworth, Georgia, on February 7 which killed 13 people.
In a statement made after Keenum's remarks, USDA said bids to fill the order will open on Aug. 14 and said the sugar must be user-quality whites that have no need for further processing with a reading of 99.5 percent polarity or more.
The delivery time frame for the order will be open until Dec. 31 and the sugar must be in containers of 120 tonnes or less.
"USDA may need to make additional adjustments to.ensure an adequate supply for the domestic market, avoid forfeitures, and prevent or correct market disruptions," the government said.
Brian O'Malley, president and chief executive of Domino Foods Inc, said the excess sugar will be coming in at a time when the U.S. beet harvest will be under way.
"I don't agree with it fully," he said. "There is no shortage of sugar. Bringing in additional sugar addresses a problem that is 12 months away."
Pedro Figueroa, managing director of ED&F Man's sugar operations in the Americas, told Reuters countries in the North American Free Trade Agreement like Canada and Mexico probably will get first crack at the import order.
The USDA said the 300,000 tons will come under the tariff quota sugar program administered by the government. The U.S. Trade Representative will shortly announce country allocations of this TRQ increase, according to the USDA.