NEW YORK — Three U.S. sugar refiners, including Domino Sugar and Imperial Sugar, have this week raised refined sugar prices by up to a third, as supplies tighten and U.S. regulators consider imposing duties on Mexican imports.
United Sugars Corp and American Sugar Refining Group's (ASR) Domino Foods Inc. issued new price lists to customers in letters Tuesday, increasing industrial prices to $37 per hundredweight (cwt), or 37 cents per pound through Sept. 30, 2015.
On the same day, Louis Dreyfus Commodities raised its list price for Imperial Sugar to $38 per cwt, but no time frame was given. All were effective immediately, according to letters to customers seen by Reuters.
The new prices represented an increase of 12 to 32 percent since October, the last time these refiners changed prices. The three companies accounted for more than half of the 11 million tons of U.S. refined sugar.
Domino’s president and chief executive officer, Brian O'Malley, said in an email to Reuters the move was “in response to higher raw sugar costs.”
Imperial declined to comment. United did not return calls or emails seeking comment.
On Tuesday, the domestic raw sugar futures price hit 25.55 cents per pound, the highest since October 2012.
Concerns about falling imports
The size of the hike surprised some traders because domestic raw prices have risen 20 percent since October.
The rally has accelerated since early April after ASR and other U.S. sugar producers accused Mexican mills of dumping subsidized sugar in the industry's first trade case in decades, raising concerns about falling imports from the major U.S. trade partner.
The U.S. Department of Commerce is scheduled to make a preliminary decision on potential countervailing duties during the summer. A ruling on anti-dumping duties is due in September.
The threat of duties is expected to slow imports, traders say.
“A large portion of the sugar for 2015 has already been contracted, so it's that much more supportive for these guys to try to get higher prices for the remainder of their book,'' said Kevin Combs, vice president for McKeany Flavell, a commodity brokerage in Oakland, California.
Domino's O'Malley would not comment on how many customers have agreed on contracts for 2015, but said some industrial customers already have at least partially covered their needs for next year.
In October, Domino and Imperial raised list prices to $33 per cwt, and United to $28 per cwt.
Global prices declining
The combination of falling Mexican imports and a smaller U.S. sugar beet crop have transformed U.S. prices even as the global market struggles with its fourth straight year of oversupply. Global raw prices have fallen about 7 percent at around 17.20 cents per pound since October.
Last year, the U.S. government scooped up hundreds of millions of dollars worth of unwanted sugar from processors.