Rise in sugar import
quota cuts prices for isle growers

But the industry accepts the change if it
keeps refiners in business

By Russ Lynch

The U.S. Agriculture Department has increased the import quota for foreign raw sugar by 220,000 short tons, after a 400,000-ton increase in January.

The added quota, announced Monday, had the immediate effect of pushing prices down for domestic sugar, including Hawaii's product, but a representative of Hawaii sugar growers said they can accept the decrease as long as it doesn't get too steep.

The lower cost to U.S. cane sugar refiners will keep the refiners alive and they are the customers for domestic sugar, said Jack Roney, Washington representative of the Hawaii sugar industry.

"The growers aren't willing to endure sharply lower prices to keep the cane refiners alive, but modestly lower prices are something the cane growers can live with," Roney said Tuesday.

The price of domestic sugar dropped in the futures market Monday after the increase in imports was announced.

May futures contracts sold for 22.6 cents a pound, down 0.11 of a cent, and contract for July and September were down 0.23 of a cent at 23.1 cents.

The U.S. Cane Sugar Refiners Association had asked for an increase of 300,000-400,000 tons.

Sugar import quotas, renewed in the just-passed farm bill, are aimed at ensuring that U.S. growers get at least 18 cents a pound for their product.

If the price is threatened, imports can be decreased to reduce the supply and send prices higher.

The United States produces some 3.4 million tons of cane sugar a year and Hawaii produces about half a million tons of that.

Imports this year will total about 2.2 million, including the quota increase, Roney said.

Bloomberg Business News contributed to this report.

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