USDA says it reduced likely U.S. sugar surplus by 300,000 tons
WASHINGTON, July 11 (Reuters) - The U.S. sugar surplus was reduced by an estimated 300,000 tons through steps to reduce imports, the government said on Thursday in a report on its work to avoid hundreds of millions of dollars in subsidy costs.
The U.S. Department of Agriculture said its activities cost $43.8 million, but averted an expected $110 million in forfeitures of sugar price support loans.
USDA said it was monitoring the market "and will take action as necessary to reduce the cost of the sugar program."
The sugar program is intended to operate at no net cost to the government but costs are expected to be high this fiscal year because of low U.S. and world sugar prices. Sugar futures in New York were well below the 20.9 cents-per-pound level that would prompt loan forfeitures.
USDA said it reduced the sugar surplus by retiring credits under a re-export program and certificates of quota eligibility, which authorize imports. It said it purchased 91,238 tonnes of sugar under a farm law provision that allows expenditures if they will save money overall.
Each ton of purchased sugar was expected to reduce import access by 3.3 tons.
Also on Thursday, USDA updated its estimates of the sugar surplus. It forecast ending stocks for 2012/13 of 2.219 million tons, or an 18.8 percent stocks-to-use ratio, a slight reduction from its June forecast of a 19 percent ratio. Ending stocks were forecast for 2.013 million tons for 2013/14, a decrease of 647,000 tons from the June estimate "mainly due to lower imports," USDA said.
(Reporting By Charles Abbott; Editing by Maureen Bavdek)