The sale of some 146,000 metric tons of raw cane sugar to China in 1986 by the Commodity Credit Corp., a unit of the U.S. Department of Agriculture, has prompted charges of dumping by foreign diplomats here.
The sugar was sold for 4.75 cents a pound, well below the world market price of 5.83 cents at the time. The sale was announced on Aug. 12, 1986, with delivery set for January-March of this year.The present world market price is six cents a pound, about half the level of four years ago.
The United States has grown from a non-player in China to this year's fourth-largest supplier, said one observer here who asked not to be identified.
Dumping is the practice of selling a commodity at below production cost or for less than it fetches on the home market.
Until this year, no U.S. sugar was exported to China.
Thailand, Cuba and Australia have long dominated sugar exports to China.
Thomas Kay, administrator of the Foreign Agricultural Service at the Department of Agriculture in Washington, said the government considered the sale to be basically in line with world market prices when transportation costs and the condition of the sugar were factored in.
Pointing out that China needed the sugar, he also noted that the 1985 farm bill prohibits the government from spending anything to store surplus sugar.
Nicholas Kominus, president of the Washington-based U.S. Cane Sugar Refiners Association, said the USDA had rejected a proposal to let members of his group bid on the sugar so they could refine it, either for export or for the government so that it could export refined sugar.
China imported 425,000 metric tons of sugar last year from Australia and 262,000 tons from Thailand. Purchases from Cuba aren't detailed, but a Western source forecasts China will buy 500,000 tons of sugar from the Caribbean island this year.
Through the third quarter of this year, Chinese customs statistics show 1.2 million tons of imported sugar - 372,000 tons from Thailand, 323,000 tons
from Cuba and 316,000 tons from Australia, in addition to the U.S. deal.
The U.S. sale was designed to relieve surplus stocks. Officials insisted it would be sold only during 1987 and wasn't meant to displace existing players.
For the rest of this year and all of next, China's rising standard of living and increased production of soft drinks is expected to lead to higher sugar imports.
Western sources predict China will import 1.8 million tons in the 1987-88 sugar marketing year, compared with 1.5 million in the previous marketing year. That was up 300,000 tons on 1985-86.
China produces sugarcane and sugar beets and exports to garner much-need foreign exchange to fuel economic development.
Sources say China will sell 500,000 tons of sugar to foreign buyers during the 1987-88 marketing year. This would be 229,000 tons higher than in the previous marketing year.
During 1986, China produced 50.2 million tons of sugarcane and 8.3 million tons of sugar beets, according to the state statistical bureau.