Analysis of the Effect of Loophole in Presidential Proclamation on Sugar

CED-78-85: Published: Mar 14, 1978. Publicly Released: Mar 14, 1978.

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The effect of the Presidential proclamation designed to protect the domestic price support loan program for sugar was reviewed. Bureau of the Census data show that November imports totaled 19,615 short tons of refined sugar, about 3 percent of the 1977 total, and December imports were 469,096 short tons, about 72 percent of calendar year 1977 refined sugar imports. Census data are published by month so it is not possible to determine what portion of November imports occurred after November 11, the date of the proclamation. Three countries provided more than 99 percent of January 1978 sugar imports: Brazil, Canada, and Guatemala. The quoted average wholesale price of both cane and beet sugar have increased monthly since October 1977; it would appear that the imported refined sugar has not caused prices to decline. The revenue not collected by the Treasury due to the absence of an import fee is estimated to be $30.2 million. It is not possible to determine the expected cost to the Treasury under the loan program. Industries that use refined sugar as an ingredient include: beverages, confectionery products, bakery and cereal products, dairy products, and processed foods. Information is not available on who has benefited from refined sugar imports since the Census Bureau data on imports do not indicate either the importer or the ultimate purchaser.

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