[Federal Register Volume 78, Number 117 (Tuesday, June 18, 2013)]
[Notices]
[Pages 36508-36510]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-14401]
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DEPARTMENT OF AGRICULTURE
Commodity Credit Corporation
Office of the Secretary
Notice of Sugar Purchase and Exchange for Re-Export Program
Credits; and Notice of Re-Export Program Time Period Extension
AGENCY: Commodity Credit Corporation and Office of the Secretary, USDA.
ACTION: Notice.
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SUMMARY: This notice concerns two separate actions. First, the
Commodity Credit Corporation (CCC) announces the intent to purchase
sugar to be offered in exchange for Refined Sugar Re-export Program
credits. CCC will purchase sugar from domestic sugarcane processors or
beet processors under the Cost Reduction Options of the Food Security
Act of 1985, and concurrently exchange such sugar for credits under the
Refined Sugar Re-export Program. Second, USDA announces a waiver to
provide an extension of the time period from 90 days to 270 days in
which licensed refiners must export or transfer sugar under the Refined
Sugar Re-export Program.
DATES: Effective date: June 18, 2013.
FOR FURTHER INFORMATION CONTACT: For current market conditions,
eligibility, and criteria for evaluation information contact Daniel
Colacicco; telephone (202) 690-0734. For sugar purchase and general
exchange information contact Pamela McKenzie; telephone (202) 260-8906.
For Refined Sugar Re-export Program waiver information contact Ron
Lord; telephone (202) 720-6939. Persons with disabilities who require
alternative means for communications (Braille, large print, audio tape,
etc.) should contact the USDA Target Center at (202) 720-2600 (voice
and TDD).
SUPPLEMENTARY INFORMATION:
USDA's Sugar Program and the Domestic Sugar Market Conditions
Under the Sugar Program, domestic sugar beet or sugarcane
processors may borrow from CCC, pledging their sugar as collateral, and
then satisfy their loans either by repaying the loan on or before loan
maturity or by transferring the collateral to CCC immediately following
loan maturity, also known as ``forfeiture'' of collateral (as specified
in 7 CFR 1435.105). The Farm Service Agency (FSA) administers the Sugar
Program for CCC. Under section 156 of the Federal Agriculture
Improvement and Reform Act of 1996, as amended (Pub. L. 104-127; 7
U.S.C. 7272), the U.S. Department of Agriculture (USDA)
[[Page 36509]]
is required to operate the Sugar Program, to the maximum extent
practicable, at no cost to the Federal government by avoiding
forfeitures of sugar loan collateral to CCC. Due to current market
conditions, if no actions are taken by CCC, the cost to CCC of
acquiring sugar by forfeiture later this year is projected to range
from $110 million to $320 million.
The Louisiana cane sugar and the U.S. beet sugar crops are setting
production records for fiscal year (FY) 2013. The U.S. FY 2013 ending
stocks-to-use ratio for sugar was projected at 18.5 percent in the May
2013 USDA World Agricultural Supply and Demand Estimates (WASDE)
report, well above its historic average. In the past, an ending stocks-
to-use ratio at or above 18 percent has been strongly correlated with
low U.S. sugar prices, and with forfeiture of sugar loan collateral to
CCC. Record FY 2013 sugar production has caused domestic sugar prices
to fall below the support level established by USDA's Sugar Program.
Refined Sugar Re-Export Program
The Refined Sugar Re-export Program (7 CFR part 1530) permits
licensed refiners to import low duty or duty-free raw cane sugar
outside of World Trade Organization or bilateral trade agreement
tariff-rate quota limits and requires the licensee to offset the
quantity imported by exporting refined sugar, or transferring refined
sugar to licensed sugar-containing product (for export) or polyhydric
alcohol manufacturers. A participating refiner must maintain a license
balance within certain limits. Sugar exported or transferred is
subtracted from the license balance, resulting in a license ``credit;''
sugar imported is added to the balance, resulting in a license
``debit.'' The maximum amount of permitted net debits--that is, the
maximum positive license balance--is 50,000 metric tons (MT) raw value.
Refiners are not required to have a negative license balance to offer
or to exchange credits for sugar offered by CCC. However, refiners will
only be permitted to exchange an amount of credits that maintains their
license balance at the maximum amount of permitted net debits, 50,000
MT raw value.
CCC Sugar Purchase and Exchange
To reduce the cost of the Sugar Program to the Federal government,
prior to the maturity of loans to sugar processors, CCC intends to
purchase sugar from the U.S. domestic market and conduct voluntary
exchanges of the purchased sugar in return for credits from Refined
Sugar Re-export Program licensees under the Refined Sugar Re-export
Program. These exchanges are expected to remove sugar from the market
at a lower cost to the Federal government than the cost of acquiring
sugar through loan collateral forfeiture.
CCC will invite domestic sugarcane and sugar beet processors to
offer sugar to CCC, as authorized by the Cost Reduction Options of the
Food Security Act of 1985, as amended (7 U.S.C. 1308a(c)), which
permits CCC to purchase sugar provided that the price paid is below the
comparable regional or State costs of later acquiring the sugar through
loan forfeiture under the Sugar Program. The purchase invitation will
describe the information needed from sugar sellers, such as sugar type,
amount, storage location, and CCC warehouse code. The purchase
invitation will also specify additional details, such as the opening
and closing dates for offers and other terms of CCC's sugar purchase.
CCC will then post a catalog listing the available sugar quantities.
The purchase invitation and catalog will be placed on the FSA Commodity
Operations Web site at http://www.fsa.usda.gov/FSA/webapp?area=home&subject=coop&topic=landing. In order to allow for
timely market pricing, CCC will permit sugarcane and sugar beet
processors to provide price offers to the catalog to coincide with the
timing of the exchange announcement's closing bid date.
Subsequently, approximately 10 calendar days later an exchange
announcement will be made in which CCC will offer available sugar to
Refined Sugar Re-export Program licensees in exchange for credits. The
exchange announcement will specify a minimum bid ratio of credits per
MT of CCC sugar. The exchange announcement is available on the FSA
Commodity Operations Web site at http://www.fsa.usda.gov/FSA/webapp?area=home&subject=coop&topic=landing.
Eligibility
To be eligible to sell sugar to CCC for the exchange, the processor
must have sugar under the CCC Sugar Loan Program. The quantity of sugar
offered by a processor cannot exceed the sugar processor's outstanding
loan quantity as of the offer due date.
To be eligible for the exchange, licensed refiners must present an
updated license balance to USDA as verification that the proposed sugar
exchange would not cause the refiner to have a positive license balance
in excess of 50,000 MT.
Criteria for Evaluation of Tenders (Offers and Exchange Bids)
CCC will combine the sugar offers and exchange bids that achieve
the greatest cost reduction relative to the costs of later acquiring
the sugar through forfeiture. The specific formula that CCC will use to
evaluate and accept offer and bid combinations will be specified in the
purchase and exchange invitations.
Refined Sugar Re-Export Program Time Period Extension
In order to allow licensed refiners sufficient time to participate
in the credit exchange described above, employing the good cause
discretionary waiver authority specified in the Refined Sugar Re-export
Program regulation in 7 CFR 1530.113, the time period in which licensed
refiners must export or transfer an equivalent amount of refined sugar,
after entering a quantity of raw cane sugar under the Refined Sugar Re-
export Program, if such entry results in a positive balance to their
license, is extended as described below. A positive balance exists when
cumulative imports exceed cumulative exports and transfers.
As specified in 7 CFR 1530.105, licensed refiners under the Refined
Sugar Re-export Program normally have 90 days after entering a quantity
of raw cane sugar under the Refined Sugar Re-export Program to export
or transfer an equivalent amount of refined sugar, if the entry results
in a positive balance to their license. For any raw sugar entered into
U.S. customs territory on a license between the effective date of this
notice and September 30, 2013, which results in a positive balance to
the license, a licensed refiner will now have 270 days to export or
transfer an equivalent amount of sugar. For any sugar entered into U.S.
customs territory on a license between October 1, 2013, and March 31,
2014, the deadline to export or transfer an equivalent amount of sugar
will now be June 29, 2014. Beginning on April 1, 2014, the 90-day limit
specified in the regulation in 7 CFR 1530.105 will apply, and licensed
refiners will again have 90 days after any entry that results in a
positive license balance to export or transfer an equivalent amount of
sugar.
This temporary extension of the time period from 90 days to 270
days will facilitate participation in exchanges for CCC sugar by
providing licensed refiners whose accumulated imports may exceed
accumulated exports with additional time to export or transfer an
equivalent amount of sugar and therefore increase participation in the
exchange by licensed refiners.
[[Page 36510]]
Signed on June 12, 2013.
Darci L. Vetter,
Acting Under Secretary, Farm and Foreign Agricultural Services.
Juan M. Garcia,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. 2013-14401 Filed 6-17-13; 8:45 am]
BILLING CODE 3410-05-P