THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S.

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1 THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: GAIN Report Number: 10/30/2013 Dominican Republic Sugar Semi-annual 2013 Approved By: Morgan Perkins Prepared By: Stephanie Larson Report Highlights: During MY 2012/2013, sugar production reached an estimated 556 TMT. For MY 2013/14, 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 tariffrate 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. 1

2 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, 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 singlecountry 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). FY 2013 TRQ Allocation Mill Allocation of U.S. TRQ (%) Share in Quantity (MTRV) Central Romana ,710 Grupo Vicini ,605 Consorcio Azucarero Central 10 18,891 Ingenio Porvenir ,702 TOTAL ,908 Source: INAZÚCAR, Resolution No , At the time of this publication, the DR had filled just over 50% of its allocation (95,434 MT). 2

3 Chart I Source: The DR s relatively low fill-rate for MY 2013 (see Chart I above) 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. 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 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, 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 (see Chart II below). 3 Chart II 1 In fact, the DR had not exported sugar to the EU since In the Final Text of the CAFTA-DR Agreement, please see Appendix I of the United States General Notes for more details: 3 The annual determination made by the Office of the U.S. Trade Representative (USTR) will be published in the Federal Register before the end of the current calendar year. 3

4 Source: 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. FY 2014 TRQ Allocation for the DR (Raw Cane Sugar) Country MTRV Dominican Republic 185,335 Total 1,117,195 Mill Central Romana Grupo Vicini Consorcio Azucarero Central Porvenir FY 2014 TRQ Allocation Allocation of U.S. TRQ Allocations are forthcoming and are issued by decree. 4

5 Production, Supply and Demand Data Statistics: Sugar Cane for Centrifugal Dominican 2011/ /2013** 2013/2014** Republic Nov 2011 Nov 2012 Nov 2013 Area Planted Area Harvested Production 4,700 4,400 4,750 4,650 4,600 4,900 Total Supply 4,700 4,400 4,750 4,650 4,600 4,900 Utilization for Sugar 4,700 4,400 4,750 4,650 4,600 4,900 Utilization for Alcohol Total Utilization 4,700 4,400 4,750 4,650 4,600 4,900 Units: 1000 HA; 1000 MT **Estimated, based on preliminary programming data. Sugar, Centrifugal Dominican 2011/ /2013** 2013/2014** Republic Nov 2011 Nov 2012 Nov 2013 Beginning Stocks Beet Sugar Production Cane Sugar Production Total Sugar Production Raw Imports Refined Imp.(Raw Val) Total Imports Total Supply Raw Exports Refined Exp.(Raw Val) Total Exports Human Dom. Consumption Other Disappearance Total Use Ending Stocks Total Distribution Units: 1000 MT **Estimated, based on preliminary programming data. 5