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Importing Sugar: A Sweet Trade Treat

donuts and candies under pilled sugar with the letters S-U-G-A-R traced out
A still shaky global market is adapting to various needs as countries manage product shortages alongside changing economic situations. Efforts to expand sugar imports to the United States have created opportunities for importers and investors.
By
Natalie Kienzle
August 29, 2022
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Last Modified: September 6, 2022

Importing sugar provides more than just a sweetness to American manufacturing - it's a necessity for many of the drink and food processing industries providing jobs in the United States. Despite the domestic U.S. sugar industry, increasing demand creates significant opportunities for importers to enter the market. 

The U.S. Department of Agriculture (USDA) and the U.S. Trade Representative (USTR) have control over sugar imports. Import restrictions on sugar products, such as tariff-rate quotas, were established by the Uruguay Round Agreements Act in 1994. Supply shortages have caused the U.S. to increase import limits as of June 2022. 

Sift your way through a few flavors worth of information on sugar imports and how you can successfully enter this competitive field. 

Importing Sugar Into the U.S.: How to Find Success

Roses are red, violets are blue, sugar is sweet as an import for you. 

Fun and rhymes aside, importing sugar into the United States pits you against a few interesting challenges. Number one among those challenges is the presence of the domestic sugar industry. During the last fiscal year, a number of events led to a decline in the U.S. production of this globally traded product. Weather delayed the planting of sugar-producing crops and an ever-increasing demand means farmers and refineries just can’t keep up. 

So how can you succeed as a sugar importer? The first step is realizing just how vast the world market is for sugar and sugar sources. With a better understanding of the whole market, opportunities become easier to see. 

The global market for sugar is split up in a few ways. 

  • Plant Sources: Sugar cane and sugar beets are the two main sources of raw sugar for processing into refined sugar. Corn is most commonly used to produce liquid sugar, syrup, such as standard corn syrup and its high fructose version. 
  • Raw Sugar: Refers to unrefined forms of cane and beet sugar. Unrefined cane sugar can be sold as its own product and is often viewed as being slightly healthier than refined sugar granules.   
  • Refined Sugar: Usually referred to as granulated or table sugar. This is the standard white sugar sold as loose grains or pressed into cubes, lumps, or even conical loaves.  
  • Brown Sugar: While technically a refined sugar, it gets a separate category because it’s colored and/or flavored using molasses, a by-product of the sugar refining process. Brown sugar is also colored and flavored using dates fruits and palm sap. 
  • Liquid Sugars: These syrups can come from plant sources, like corn syrup, and through the reduction of cane juice and maple sap. Molasses and treacle are liquid by-products of the refinement process itself. Scientifically, bee-produced honey is also a liquid sugar. 
  • Confectionary Sugar: Refined sugars milled into fine powders often used in dessert decorations. It’s also known as icing sugar or caster sugar depending on where you are sourcing from. 
  • Sugar Alcohol: Officially known as polyhydric alcohol, this is used in some artificial sweeteners. They come from natural foods but are processed in such a way that drastically reduces their calorie count. 

The variety of products works for importers because it creates various avenues to expand or shrink into as we enter a fluctuating world trade economy. 

If you plan on importing honey specifically, check out our article on what you need to know. 

importing sugar cane loaded onto the back of a open trailer

What is the Sugar Import Program?

As with other imports that may compete directly with domestic industries, sugar imports are regulated on a few different levels. The sugar import program is actually a standard policy within the USDA that’s aimed at controlling the amount of sugar available to the U.S. market

Different government acts and trade agreements with other nations impact the success of an importer within the program. 

  • Agriculture and Food Act of 1981 (Farm Bill/Farm Acts): At the foundation of the program, the agreement was designed to allow the program to operate without cost to the federal government
  • Feedstock Flexibility Program (FFP): Sugar production or imports that exceed food consumption requirements are sent out to ethanol-producing plants. 
  • Uruguay Round Agreement on Agriculture (AoA): In this agreement, in which the World Trade Organization (WTO) participated, the U.S. must allow the import of a minimum amount of sugar, both refined and not.  
  • United States-Mexico-Canada Agreement (USMCA): A Free Trade Agreement (FTA) that allows duty- and quota-free sugar imports to enter from Mexico within set terms. There is a limit on imports from Canada, but in the case of a national increase, it gets first access. 

These regulations and FTAs must be carefully navigated by importers to avoid fines and higher tariff rates that could eat away at profits. 

Other FTAs that specifically allow for the import of sugar and sugar products include: 

  • Central American Free Trade Agreement - Dominican Republic (CAFTA-DR)
  • United States Colombia Trade Promotion Agreement (TPA)
  • Panama Trade Promotion Agreement (PATPA)
  • Peru Trade Promotion Agreement (PETPA)

Of course, it’s possible to import sugar from countries where we don’t have FTA, but this list can provide a starting point for new importers. 

The services of an experienced Customs Broker are usually required to obtain the necessary documentation for the import of regulated products, especially if you are new to the importing business. 

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Do You Need A Permit to Import Sugar?

The need for a permit or license for importing sugar depends on the type, quantity, and source nation you are importing from. In short, yes you need an import permit or certificate of quota eligibility from the USDA for the majority of sugar imports

These are two different documents. Depending on a few different factors, you may need one or both. Let’s start with the import permit itself. 

Sugar cane imports, whether of the cane itself or any of its related by-products, need an Animal and Plant Health Inspection Service (APHIS) permit from the USDA. Granted, sugar cane is not sugar, but it is the source of raw cane sugar. If you were looking to import a lower tariff product for the purpose of providing raw material to sugar refineries in the U.S., this is one way to do so.  

There are two kinds of APHIS permits for sugar cane and its related by-products. 

  • PPQ 587: Applies to material not capable or intended for replanting. This would be the case if you were importing cane for a refinery. 
  • PPQ 588: Applies to imported sugar cane intended for planting and farming. If you are working with sugar plantations that need to diversify their stock, you may need this. 

As for sugar beets, they were granted special unregulated status in 2012 by the USDA. Most sugar beets in commercial use are genetically designed to be resistant to a specific herbicide known as Roundup®. 

These engineered sugar beets, referred to as H7-1 or Roundup® Ready (RR) sugar beets, do not need an APHIS permit for import. 

APHIS permits can only be submitted by U.S. residents with a domestic address. Foreign importers would need a partner agent within the U.S. to qualify and act on their behalf. 

Now for actual sugar, refined and raw. As with APHIS, there are different types of Eligibility Certificates to import sugar. 

  • Certificate of Quota Eligibility (CQE): Indicates that you have permission to import a specified amount of sugar from a declared country at a lower tariff rate. 
  • Specialty Certificate: This certificate is needed if you plan on importing a specialty sugar outside of the standard raw or refined categories. It’s also required if your specialty sugar imports are from Panama and Peru.    
  • Re-Export Program Specialty Certificate: This allows an importer to bring in sugar for the sole purpose of using it to create a variety of products for re-export. There are three different classes of this certificate.

These certificates revolve around import quotas which limit how much raw and refined sugar, as well as specialty sugars and sugar-containing products, enter the U.S. There’s enough regulation of sweets to make your teeth hurt. 

Even so, we want to ensure you can enter the sugar import market successfully. Thankfully, this has actually become easier. Demand for sugar keeps going up, as do prices, so quotas or not, there is room for growth. 

worker packing smaller bags of sugar into a large bulk sack

USDA Sugar Quotas

As mentioned, importing sugar into the U.S. is controlled through a set of quotas. More specifically though, Sugar Tariff-Rate Quotas (TRQs) regulate the amount of sugar allowed as an import at a lower duty rate. To clarify, it doesn’t mean that sugar above a certain tonnage will be turned away. It means that if you import more sugar than what is allocated on your import certificate, you pay a higher duty rate. 

This two-tier system allows importers to make a good profit from sugar sales while preventing market dumping that could damage domestic production. 

When the AoA was passed in 1994, the U.S. agreed to a minimum import number for raw and refined sugar. 

Original AoA Import Agreements

CategoryAmount in Metric Tons Raw Value (MTRV)
Raw Sugar1,117,195 MTRV
Refined Sugar22,000 MTRV

These amounts can be increased to combat any domestic shortages, but can’t go any lower. Within the refined sugar quota is a subsection for specialty sugars. Its base TRQ is 1,653 MTRVs. 

What is the Difference Between Raw Sugar and Refined Sugar?

When selecting your imports, it’s best to thoroughly understand how the products in each category are defined. The difference between raw and refined sugar is the amount of sucrose present. Polarity measures the percentage of sucrose. 

Sucrose is the chemical designation for a type of sugar. The others are fructose and glucose. Only sucrose sugars are subject to TRQs

The refinement process used to create standard, granulated table sugar purifies sugars and increases their polarity by removing the molasses that gives raw sugar its darker color. The more molasses sugar has, the lower the polarity.

To qualify for a raw sugar CQE, the product must have a polarity of fewer than 99.5 pols. Anything higher is defined as refined sugar. One reason for the measurement process is the lower sugar TRQ for raw compared to refined products. 

You can also check category status through HTS code. 

HTS Codes for Sugar Categories

Raw Sugar:
1701.13.1000
1701.14.1020
1701.14.10.40
Refined Sugar:
1701.12.1000
1701.91.1000
1701.99.1015
1701.99.1017
1701.90.1000
2106.90.4400
Source: CBP Fact Sheet

The codes used for refined sugar are the same as those used in specialty sugar imports. The main difference is that specialty sugars require a USDA Speciality Certificate.  

Specialty sugars within the refined sugar category are defined in a specific list, last updated in 1996 in the Federal Register. 

Specialty sugars currently include:

  • Brown slab sugar (slab sugar candy)
  • Pearl sugar
  • Vanilla sugar
  • Rock candy
  • Demerara sugar
  • Dragees for cooking and baking
  • Fondant
  • Ti light sugar
  • Caster sugar
  • Golden syrup
  • Ferdiana granella grossa
  • Golden granulated sugar
  • Muscovado
  • Molasses sugar
  • Sugar decorations
  • Sugar cubes
  • Organic refined sugar

The organic sugar market actually presents a rather unique opportunity for importers. The demand for natural and organic products is still rising, and as of now, there is only one company within the U.S. producing certified organic sugar. 

For more information on organic imports, check out our Definitive Guide to Importing Organic Food

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Who Can Apply for a Certificate of Quota Eligibility?

Total tonnage is divided up among applicants from 40 different countries, not including nations with FTA’s with specific sugar provisions. 

The USTR decides the amount allocated to each country during a fiscal year, which actually begins on October 1 of each year. Importers can file for an allotment on a first-come, first-serve (FCFS) basis until the quota has been filled. 

Anyone looking to import from one of the 40 countries recognized by the USTR or from an FTA country, including foreign residents, is eligible to apply for a CQE

There are other important characteristics of a CQE that importers should know. 

  • Certificates are applied for and issued through the USDA
  • The certificate will have a number that identifies the allocated quota and country of origin
  • Certificate is only valid for the issued period, which may be the entire fiscal year or a range of months
  • Must be included in port entry documents
  • Certificates do not guarantee low duty entry, they allow importation at a lower rate until the TRQ is filled

If you happen to go over your quota, the sugar can still be brought in, but at the over-quota tariff rate which is higher. If you don’t want to pay the higher rate, you do have other options. 

  • Bonded warehouse: These facilities are duty-free storage solutions that allow duty payments to be remitted for five years or until products are removed to enter the U.S. market. 
  • Re-Export: The sugar products can be sent back to the supplying countries or possibly sold elsewhere. However, they cannot undergo any kind of processing or change on U.S. soil. 
  • Destruction: If warehousing or re-export aren’t viable options, you can choose to destroy the product under CBP supervision to avoid the over-quota tariff rate. 

None of these options are without some kind of cost, even destruction. The CBP will still charge you a fee for use of their supervisory time and possibly for the use of facilities to destroy the product. 

Why Does the U.S. Impose Tariff Rate Quotas on Sugar Imports?

The regulation of sugar imports began with the 1981 Farm Bill. TRQs are one of the methods used to stabilize U.S. sugar prices which tend to be higher than those of the world market. Price control protects the agricultural sector of the sugar industry. 

The U.S. is currently in sixth place in terms of sugar production in the world, and much of it is used domestically. Sugar cane and sugar beets are commercially grown in 14 different states and represent thousands of jobs. Without regulation, the domestic industry could be outpriced and unable to keep up with foreign prices. 

Without domestic production, those high U.S. sugar prices would probably be even higher. This shouldn’t turn you away from importing though. Even with those regulations in place, the U.S. ranks number three in the world for sugar imports. 

During the 2021/2022 fiscal year, Statista reports that the U.S. imported about 3.15 million metric tons of sugar

worker on a forklift moving large bags of sugar

Re-Export Program Specialty Certificate

If you want to avoid the complexity of the TRQ system, you can work within the USDA’s re-export program instead. There are three different re-export program certificates issued by the USDA

These products are not subject to TRQs because they are not intended to stay within the domestic market. They are actually encouraged as a way of using U.S. refineries and manufacturing facilities to their fullest potential.   

There are three different re-export programs, each one affecting a slightly different market within the sugar industry

The application process for each subsection of the re-export program is similar. You must provide a name, address, and the address of where records are maintained. 

Additional information needed includes:

  • Addresses of the processing plants or co-packer plants you will partner with
  • A record of the tested polarity of the imported products
  • Certified statements that you are not linked to any other sugar licenses
  • A document agreement that provides a list ahead of time of how you will be gathering and storing information

The USDA provides a variety of options for importers to use as part of the document agreement. If you want to use a document that they don’t yet recognize, you can still make the suggestion. It's important to choose documents you know you can get a hold of because these could also be used for auditing purposes. 

Importers who are using a U.S. agent to represent them in-country need to have the individual indicate they are acting on behalf of the licensee. 

USDA Refined Sugar Re-Export Program

This is the broadest of the re-export programs in the sense that it covers three different aspects of the sugar industry. Importers and refiners can obtain this license. 

A license from the USDA within this program permits the following:

  • Refineries can export domestic refined sugar and import raw cane sugar, which has a much lower duty. 
  • Raw cane sugar is imported with the intent to refine and distribute it to U.S. makers of sugar-containing products or to producers of sugar alcohols for non-food purposes. 
  • Importing raw sugar for refinement and then exporting directly to world markets with none being released domestically. 

Effective use of this program helps the American manufacturing industry and opens the path to a foreign market for importers to expand their trade.

License holders are required to submit the following information about each import to the Foreign Agricultural Service (FAS) online portal

  • Unique number identifying each transaction
  • Identifying the transaction as an export, import, or transfer
  • Transaction date
  • Amount in Metric Ton Raw Value (MTRV)
  • Quantity in pounds
  • Internationally recognized country code
  • The license number of however received the merchandise

All the documents that this information comes from should also be kept secure. The USDA and FAS may request them to verify the information you provide. 

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Sugar-Containing Products Re-Export Program

This license would be for importers focused only on the manufacturing field. Importers with this license can bring in any world-priced sugar, raw or refined. 

However, it must be used in products that are intended for export to the world market and should not be placed into domestic circulation. 

Just like the refined sugar re-export program, a record of transactions must be submitted to FAS. However, it isn’t as extensive and requires only four fields.  

  • Unique number identifying each transaction
  • Transaction date
  • Quantity in pounds
  • Internationally recognized country code

Once again, all documents serving as proof of the submitted information should be stored for verification and possibly audit purposes. 

Sugar for the Production of Polyhydric Alcohol Program

Sugar alcohol and polyhydric alcohol is the same substance. The preference of one term over another generally has more to do with the industry it's being used in. 

Most familiar is the use of the term sugar alcohol as it relates to making low-calorie sweeteners. However, if you are obtaining a license in this program, the sugar alcohol cannot be used to produce anything intended for human consumption.

This takes us to the industry that uses the more scientific term, polyhydric alcohol. Chemists use it to create:

  • Adhesives 
  • Lubricants
  • Pesticides 

These, along with a few others, are the products that can be exported if you import sugar within this program. 

FAS requires licensees of the polyhydric program to submit:

  • Unique qualifying number identifying each transaction
  • Transaction date
  • Quantity in pounds

Although less information is recorded within FAS, it is still just as important to retain all import documents. 

sugar cane being loaded into the top of an open boxcar

U.S. Sources: Where do We Get Sugar From?

Provided that you can get all your documents and permits in order, where are the best places to import sugar from? At the moment, some of the most affordable places to import sugar from are Mexico and Canada

Due to the USMCA, sugar from Mexico and Canada is nearly duty-free within a set quota and shipping is more affordable because it doesn’t require ocean passage. 

In terms of allotted TRQ shares, the other top nations are:

  • Dominican Republic: 17%
  • Brazil: 14%
  • Philippines: 13%

It’s important to recall that the allowed TRQ amounts are divided among 40 nations. That means that outside of the five nations mentioned, affordable sugar imports are very limited. 

Sugar Imports From Mexico

In 2014, the International Trade Commission (ITC) and the Department of Commerce (DOC) started an anti-dumping and countervailing investigation against sugar from Mexico. As a result, a suspension agreement between the U.S. and Mexico in 2014 was reached. This agreement placed import limits in place and required all sugar imports from Mexico to have an export license. 

Further amendments were made to the suspension agreement in 2017 that set specific reference prices for imported Mexican sugar. 

  • Refined sugar with a polarity of greater or equal to 99.2 enters at 0.28 cents per pound
  • Raw sugar with a polarity of less than 99.3 enters at 0.23 cents per pound

The raw sugar must be transported free-flowing in a bulk container. No kind of packaging is permitted. Refineries in the U.S. must process and package the sugar according to Food and Drug Administration (FDA) regulations. 

If either nation pulls out of the suspension agreement, duties could rise to as much as 80% because antidumping and countervailing duties would be enforced.  

So far, the suspension is holding. As of 2020, the U.S. was still getting over 30% of its imported sugar from Mexico. Canada comes in second and accounts for 16.9% of U.S. sugar imports. 

Outside of Mexico and Canada, many nations have been steadily increasing their sugar export numbers. 

Top Sugar Exporters (Net Value in 2020)

Brazil $9.02 Billion
India$2.35 Billion
Thailand$2.05 Billion
Germany$982 Million
Source: OEC

Of these four nations, Brazil has had the most impressive growth. Between 2019 and 2020, Brazil managed to increase its sugar exports by 69%

For importers looking for new opportunities, this is a big deal. There has never been a better time than now to get into the industry. As of July 2022, the USTR announced it was increasing its TRQ by 235,000 MTRVs for raw cane sugar; refined and specialty sugar are also expected to get increased TRQs.

How to Import Sugar From Brazil

Let’s get a better look at what it would take to import sugar from Brazil. While other nations on the previous chart have impressive production values, they are all eastern hemisphere countries. A simple comparison of average trade lane rates reveals the difference that makes in shipping costs. 

To ship a forty-foot container across the Pacific costs between $17,000 to $15,000, depending on whether it’s heading for the West Coast or East Coast. In comparison, a shipment from Brazil to the U.S. runs between $5,000 and $6,000 per container

That is a $10,000 difference in shipping

Considering there is still a duty to be paid upon import, that 10K you can save by shipping from closer sources can go towards licensing, duties, and your profits. 

As a country right in the middle of the Tropics Belt, Brazil has always had an ideal environment for growing sugar cane, the number one source of raw sugar. However, prior to the Covid 19 pandemic, most of the sugar cane grown in the country was marked for use in ethanol production. 

A rocky fuel market led to increased amounts of cane being processed into sugar instead, a trend that has continued thus far. Importers can take advantage of the added availability and the increased TRQ allotment. 

Current Tariff Rates - 2021

ProductIn-Quota TariffOver-Quota Tariff
Raw Sugar0.663 cents per pound15.36 cents per pound
Refined Sugar1.660 cents per pound16.21 cents per pound

These are the base charges for raw and refined sugars. Anything that counts as a specialty may have a different tariff. 

We highly recommend that you speak with a licensed Customs Broker prior to making any final decisions or officially starting the import process. If you have an outline of what you hope to accomplish, that may help an experienced consultant guide you through the proper channels. 

Speak to an Import Specialist Today!
Schedule a 1-on-1 Consulting Session to Talk About Your Next Sweet Trade
START SAVING

Get Your Sweet On With USA Customs Clearance 

Take your shot at importing sugar into the U.S. and make the world just a little sweeter. USA Customs Clearance is here to guide you through the process and ensure your success. 

Our 1-on-1 Customs Consulting sessions are always between you and one of your licensed and experienced Customs Brokers. We’ve helped hundreds of clients ship thousands of products from all over the world. 

Get the advice your business deserves and get your import started right with all the proper documentation. 

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Call us today at (855) 912-0406 or schedule your personal consulting session online now. Start your import journey with experience on your side.

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