* Industry says highe quota will moderate prices
* Letter notes estimate up to 961,000 tons needed
* April 1 is first day U.S. can increase the quota
WASHINGTON, March 28 (Reuters) - Foodmakers asked the U.S. government on Wednesday for a hefty increase in the sugar import quota, saying supplies are running short because of strong domestic demand and smaller-than-expected shipments from Mexico.
The Sweetener Users Association, representing food and beverage companies, asked for immediate action on an increase that would fill sugar needs through the Sept 30, the end of this marketing year. April 1 is the first day the Agriculture Department is allowed by law to boost the import quota.
The trade group did not suggest a specific amount. But its letter noted an estimate that up to 961,000 short tons of sugar would be needed for a comfortable-sized stockpile equal to 15 percent of annual use on hand at the end of the marketing year.
In a letter to USDA, the group said, ”The U.S. market needs substantial additional supplies of sugar, and a TRQ (tariff-rate quota) increase is the only way to provide adequate supplies at reasonable prices.
“USDA’s consideration of a TRQ increase must occur in the context of disappointing Mexican production and exports, as well as continued strong U.S. domestic demand. These factors strongly point to the need for additional supplies,” said the letter.
The import quota for this marketing year was set initially last summer at 1.23 million short tons, or 1.117 million tonnes, the minimum amount to satisfy U.S. trade agreements. The United States and Mexico have free trade in sweeteners.
Imports account for a quarter of the U.S. sugar supply with Americans consuming an estimated 11.6 million short tons of sugar this year. Mexico is expected to supply 1.1 million tons.
U.S. sugar growers and foodmakers disagree frequently over import needs. The government assures a minimum price for domestic sugar. (Reporting By Charles Abbott; Editing by David Gregorio)