Sugar Import Quotas

Julia Cahn
  https://www.wsj.com/articles/SB1000142405270230333990457640
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 Potential crop shortages of sugar farmers has led to the increase in

the sugar import quota for the second time this year
Article  The USDA raised the quota for low-tariff or duty-free sugar by
Summary 120,000 short tons. In April, the department raised the quota by
325,000 short tons. With the latest increase, the total quota is
about 1.6 million tons for the year
 Sugar manufacturers believe that this increase still isn’t enough to
cover the shortage
  The quota exists in order to protect U.S. sugar-cane and sugar-
beet farmers
 The World Trade Organization requires that the USDA set the mini
tariff-rate quote to 1.2 million tons
Analysis  Domestic supply and demand is then monitored to see if the
quota needs to be raised beyond that amount
 If more sugar needs to be imported, then the cost to supply sugar
will increase. This will lead to overall price increases
  By setting quotas, the government is attempting to find the
equilibrium between domestically producing sugar and importing
sugar.
 Unfortunately, if there are shortages of domestic supply, prices
will need to increase due to international tariffs
Analysis  While the quota increased for this fiscal year, based on the amount
of domestic supply next year, the quota may decrease
 If it decreases, sugar prices will then decrease and return to its
normal state