Report Highlights:

During MY 2012/2013, sugar production reached an estimated 556 TMT. For MY 2013/14, Post forecasts overall production of 541 TMT. During CY 2012, exports of raw cane sugar totaled 228 TMT, while imports totaled 60 TMT. Finally, the Dominican Republic did not fill the U.S. annual sugar tariff-rate quota (TRQ) for FY 2013 as market conditions favored pursuing export sales of 71 TMT to the European Union, leaving only 95 TMT available for export to the U.S. market.

Production:

According to the Dominican Sugar Institute (INAZÚCAR), total sugar production reached 555,610 metric tons (MT) during Marketing Year 2012/2013 (MY 2013), comprised of 385,560 MT raw and 170,050 MT refined. For MY 2014, Post forecasts overall production to be lower (around 541 TMT) due primarily to prolonged drought conditions that affected many regions of the country earlier this year.

Consumption:

Annual domestic consumption remains stable at an estimated 380 TMT. Based on information obtained by the Dominican Sugar Institute, stocks are relatively high and, as a result, imports are expected to be lower in the coming year. 

Trade:

For calendar year 2012 (CY 2012), INAZÚCAR reports that exports of raw cane sugar totaled 228 TMT, while imports for the same period totaled 59,865 MT.

During fiscal year 2013 (FY 2013), the Dominican Republic once again received the largest single-country allocation for the U.S. annual sugar tariff-rate quota (TRQ). It was divided among the four major sugar mills. Specifically, the amount allocated to the DR for FY 2013 totaled 188,908 Metric Tons Raw Value (MTRV).

At the time of this publication, the DR had filled just over 50% of its allocation (95,434 MT).

The DR’s relatively low fill-rate for MY 2013 is due almost entirely to exporters’ pursuit of sales opportunities in alternate markets, as a consequence of lower price premiums prevailing in the United States. The DR enjoys both quota- and duty-free access to the European Union (EU) as a member of the EU-CARIFORUM Economic Partnership Agreement (EPA). Though historically, the DR has consistently given priority to filling the U.S. quota and only exporting to the EU when supplies allow,1 current market conditions favor shipping to the EU. During this past marketing year, the DR exported approximately 71,000 MT of raw cane to the EU, compared with just over 95,000 MT to the United States.

Post also notes that in the context of the CAFTA-DR framework, an additional 3,066 MT were allocated to the DR for a specific basket of sugar and sugar-containing goods during the current calendar year 2013. Since the implementation of the Agreement, the DR has qualified for the additional access in some years, but has never filled the annual quotas. Despite the small amount allocated for CY 2013, Post does not expect the DR to fill the quota before December 31, 2013 based on the country’s historical performance. At the time of this publication, the DR had filled just over 3.6% of their respective allocation for CY 2013 (113 MT) and is not expected to qualify for the additional access during CY 2014.

Most recently, the U.S. announced sugar quota allocations for FY 2014 and once again, the DR received the largest single-country allocation, representing close to 17% of the entire TRQ