Proposal would lift
sugar imports

The plan calls for an automatic hike
when U.S. production sags

By Russ Lynch
Star-Bulletin



A proposed federal program would automatically increase imports of foreign sugar in 200,000-ton increments when the U.S. sugar inventory slips to 15.5 percent below anticipated consumption.

Some Hawaii growers, like their counterparts on the mainland, think the trigger is too high and worry that excessive imports would push down domestic prices. U.S. growers say the gap between demand and supply should be smaller before imports kick in, preferring a supply level 13.5 percent below consumption, which would mean less importing and less risk of falling prices.

But the U.S. Department of Agriculture is predicting that the system won't bring prices too low, said Alan Kennett, chairman of Hawaii's sugar industry association, the Hawaii Agriculture Research Center.

The proposal, which has a Sept. 16 deadline for a decision by Agriculture Secretary Dan Glickman, would set a basic import allowance of 2.5 million metric tons for the year and allow additional 200,000-ton import increments in when the trigger is reached.

Refiners, including Alexander & Baldwin Inc.'s California & Hawaiian Sugar Co., support the idea because they say they will better be able to predict supplies. National grower organizations, however, say it will increase imports too much and decrease prices.

"We would like the trigger to be a little lower," said Kennett, general manager of Gay & Robinson Inc., a Kauai grower. "But we recognize that the USDA is trying to keep us all happy, the producers, the refiners and the users."

"This is a step in the right direction and it's a more equitable means of managing the quota," said John Kelley, a vice president of A&B. A&B is a major refiner through C&H but is also Hawaii's biggest sugar grower at Hawaiian Commercial & Sugar Co. on Maui.

The company has said that a stable refining industry is vital to the growers.

The USDA projects total U.S. beet and cane sugar production of 6.3 million tons for this year, with about 400,000 tons coming from Hawaii. The United States imports 54 percent of its total sugar consumption.



Bloomberg Business News contributed to this report.




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