U.S. Doubles Refined Sugar Export Limit on Expanding Supply

The U.S. doubled the amount of refined sugar exports allowed by processors to 100,000 metric tons because of expanding supplies in the domestic market.

The increase took effect May 1 and will revert back to 50,000 tons on Jan. 1, 2015, the U.S. Department of Agriculture said in an April 30 notice on its website. U.S. sugar production will climb 5.8 percent to 8.98 million short tons (8.1 million metric tons) in the year ending Sept. 30, the USDA said April 10. Stockpiles are forecast at 2.1 million short tons, 55 percent higher than two years earlier, USDA data showed.

The premium white sugar commands over the refined variety fell 14 percent this month on speculation producers in Thailand, the second biggest exporter, are boosting output of the refined variety. White sugar was $100.1096 a ton more expensive than the raw futures, down from $117.0869 a ton at the end of last month.

The U.S. doubling the amount of white sugar that can be exported could also be having an impact on the premium, Michael McDougall, head of the Brazil desk at brokerage Newedge Group in New York, said in a report e-mailed today. “Last year a total of 250,000 tons of white export was exported under the normal scheme, so could 500,000 tons be exported and has someone already sold the white premium anticipating this? It is interesting to note that the white premium began its sudden drop off on May 1.”

The refined sugar re-export program allows processors to import raw sugar as long as they export an equal amount of refined sweetener or as an ingredient in sugar-containing products, the USDA said. The department said it will continue to monitor the U.S. market and may take more steps if needed.

U.S. sugar futures traded on ICE Futures U.S. in New York have dropped 12 percent this year, after slumping 38 percent last year.

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