The US Department of Agriculture has increased the amount of sugar US producers can sell domestically and raised the tariff-rate quota on sugar cane imports by half a million tons.
Expected increased demand and market uncertainty, including questions over the role of genetically engineered (GE) crops in the country’s food supply chain, led to the decision. The USDA is required to maintain adequate sugar supplies, with allotments required to meet at least 85 percent of domestic demand.
“America’s beet sugar producers have made significant investments in a strong 2016 crop, but they continue to face uncertainty. This … is in part due to inaction on GE labelling legislation and lack of consumer information about genetic technology,” said a USDA press release.
All sugar beet production in the US is GE, and the crop accounts for more than half of production. Last year the Hershey Company announced plans to eliminate GE ingredients from much of its supply chain in response to consumer demand.
The USDA estimates the US will consume 12 million tons of sugar in 2016. The total tariff-rate quota for US sugar imports has now been set at around 1.4 million tons.
World sugar prices have been unstable this year. A March report from Rabobank attributed price volatility partly to demand for organic sugar, which was disrupting the US market, as well as to sell-offs from hedge funds.