Australia-Sugar quotas.

AUSTRALIA-SUGAR QUOTAS.

Under rules set in the 2008 United States Farm Bill, this week is the first time US Department of Agriculture can tinker with foreign sugar import quotas.

Large food manufacturers started their campaign several weeks ago, aggressively lobbying agriculture officials to increase import levels above the 1.3 million tonnes of sugar that the US has already committed to import in 2009.

But according to a report Tuesday that was issued by the American Cane Sugar Refiners’ Association, increasing imports would jeopardise the ability of US cane sugar refiners and beet processors to meet market needs by weakening an industry already under pressure from rising costs and stagnant prices.

Jack Roney, an economist with the American Sugar Alliance, says there is no better indicator of supplies than price.

While raw prices have rebounded slightly in the past week, they are still lower than normal and barely hovering around the break-even point.

No one disagrees that food manufacturers would make more money if additional subsidised foreign imports flooded the sugar market, although, Mr Roney noted this would not translate to cheaper grocery bills for everyday citizens.

"It is imperative that the Department not act precipitously to increase the quota since sugar, once entered into the US, cannot be removed," the report said.

"Conversely, additional imports can always be bled into the system should a genuine need materialise at a later date."