I would not panic. I read this online Here
10/28/2005 6:00:00 AM
Sugar supply remains stable
Idaho Staff Writer
Consumers with a sweet tooth can relax. Theyâ€™ll get their sugar fix this holiday season without paying a fortune for it, industry representatives insist.
U.S. sugar supplies remain stable and retail prices relatively flat despite recent disruptions caused by hurricanes in the Gulf, industry leaders said last week.
Hurricanes Katrina and Rita disrupted sugar cane production in the Gulf Coast, prompting concerns from many end users, including candy manufacturers.
Officials with the American Sugar Alliance acknowledge that a few small buyers have complained about tight supplies and higher sugar prices.
But ASA officials insist that those are isolated cases.
â€œThereâ€™s enough sugar out there and no additional imports are needed,â€ said Jack Roney, director of economics and policy analysis for the ASA.
â€œIn fact, the vast majority of sugar users purchased their sugar on a contract basis well before the hurricanes at rock bottom prices,â€ Roney said.
But any buyers making purchases on the spot market now are paying much higher prices than a year ago.
Wholesale prices have nearly doubled in the past year â€“ from about 24.5 cents per pound to about 42 cents per pound â€“ according to statistics compiled by Miller and Baking News, a publication that tracks sugar prices for manufacturers.
At least one candy manufacturer in the Chicago area recently curtailed production for a few days, waiting for sugar prices to come down, the Chicago Tribune reported last week.
But retail sugar prices still remain under control, Roney said.
The average sugar price paid by grocery shoppers in September was 43.7 cents per pound, according to the U.S. Department of Agriculture.
That price has remained virtually unchanged for 20 years and fluctuated little despite the recent hurricanes, which limited sugar supplies from Louisiana, Roney said.
Immediately following Katrina, the USDA allowed 500,000 tons of domestic sugar that had been held in reserve to be marketed. The agency also increased the amount of sugar that can be imported.
Those actions have alleviated any short-term supply problems, Roney said.
â€œAmericaâ€™s sugar policy is working as it was designed to,â€ he said. â€œPrices have remained fair, and there have been no significant product shortages. The response to these disasters proved just how effective our policy is.â€
Idaho sugar beet growers have benefited from the tighter market and the actions taken by USDA to free up more sugar from reserve stocks.
Boise-based Amalgamated Sugar Co. recently took advantage of USDAâ€™s increased marketing allocations by putting previously held-back sugar on the market.
That has helped boost returns for the grower-owned company.
Members of the Snake River Sugar Co. co-op, which owns Amalgamated, were told in September that they would receive a supplement payment for the 2004 crop.
The supplemental payment will average about $1.50 per ton, boosting the total payment for the 2004 crop to about $36.50 per ton.
Dave Wilkins is based in Twin Falls, Idaho.