Strategic Maple Syrup Reserve Close to Empty
shrewdsheep writes:
Canada's official maple syrup reserve is sitting near empty, the result of a strong surge in demand that has drained supply to levels not seen in more than a decade.
The Quebec industry, worth about $1.2-billion a year to the province's GDP, produces most of the world's maple syrup. And its stockpile is maintained by a government-sanctioned cartel called the Federation of Quebec Maple Syrup Producers, known by its French acronym PPAQ.
"At the end of next February, all the remaining syrup sold under contract will be gone," said Simon Dore-Ouellet, deputy director-general at PPAQ. "Our warehouses will be at zero."
The PPAQ sets minimum prices for bulk shipments, regulates production volumes through quotas, and monitors safety and quality standards.
Maple syrup that's not sold goes to three warehouses in Quebec with a combined capacity of 133 million pounds (218,000 barrels worth $400-million if the space is all full) that can be drawn on when weather conditions yield a lower crop. The aim is to have a greater stability in supply and pricing from season to season.
At the moment, demand from consumers is simply outstripping supply. Bulk buyers and processors, such as Rogers Sugar Inc. and Les Industries Bernard & Fils, are snapping up higher volumes of syrup to meet that demand and sell to retail customers. Increasing their stocks also gives them more operational flexibility in the context of trade tension with the U.S., when they might need to make quick shipments on a timely basis.
"This is the first time we're seeing a situation like this. There's much more inventory in the hands of our big buyers than in the past," Mr. Dore-Ouellet said.
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