U.S sugar refineries hike prices again as supplies tighten
NEW YORK May 29 (Reuters) - 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 on Tuesday, increasing industrial prices to $37 per hundredweight (cwt), or 37 cents per lb, 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.
Domino 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, while United did not return calls or emails seeking comment.
The new prices represented an increase of between 12 to 32 percent since October, the last time the refiners, which accounted for more than half of the 11 million tonnes of U.S. refined sugar, changed prices.
The size of the hike surprised some traders because domestic raw prices have risen 20 percent since October.
On Tuesday, the domestic raw sugar futures price hit 25.55 cents per lb, the highest since October 2012.
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.
But 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 have already covered or 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.
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 lb since October.
Last year, the U.S. government scooped up hundreds of millions of dollars worth of unwanted sugar from processors aimed at reducing inventories. (Reporting by Marcy Nicholson; Editing by Josephine Mason and Paul Simao)
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