Aug 1 - The Commodity Credit Corporation has announced the results of additional action taken on July 26, 2013, to reduce the domestic sugar oversupply and reduce the cost of the CCC Sugar Loan Program. The second sugar exchange effort in the past two months reduced the sugar oversupply and further minimized the severity of sugar loan forfeiture to CCC by 46,559 metric tons by retiring credits under the Refined Sugar Re-Export Program. This action cost CCC $6.9 million, but averted an expected $19.2 million in loan forfeiture costs, saving an estimated $12.3 million.
CCC used the $6.9 million to purchase 15,504 metric tons of sugar under the Cost Reduction Options of the 1985 Farm Bill, which authorizes CCC to purchase surplus program crops if the purchase results in expected program savings. The purchased sugar was exchanged for sugar import access generated by the Refined Sugar Re-Export Program at an average ratio of 3 tons of import access per ton of CCC sugar. Additional information on this action can be found online: www.fsa.usda.gov/FSA/webapp?area=home&subject=coop&topic=pas-sa.
CCC is monitoring the market on an on-going basis and will take action as necessary to reduce the cost of the Sugar Program. Sugar Program costs are expected to increase in 2013 due to record crops in North America and world prices that no longer support U.S. prices at the Sugar Program support level.