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USDA Sugar and Sweeteners Outlook


18 August 2014

USDA Sugar and Sweeteners Outlook - 18 August 2014USDA Sugar and Sweeteners Outlook - 18 August 2014


USDA Sugar and Sweeteners Outlook

NAFTA Sugar August 2014

The Mexico 2013/14 estimate for sugar production is reduced by 5,000 metric tons (mt) to 6.020 million, based on end-of-harvest reporting from Mexican authorities. The 2013/14 estimate of exports is increased by 50,000 mt based on pace-to-date of exports to the United States. Deliveries for consumption are reduced by 106,000 mt, based on a slowdown in the pace through June. Because these changes imply 2014/15 beginning stocks 51,000 mt higher than last month, imports in 2014/15 are reduced by that same amount to keep just enough sugar on hand in Mexico to meet consumption needs until the full start of the 2014/15 harvest in mid-December. There are no changes to 2014/15 production, deliveries, total exports, or ending stocks. Exports to the United States are reduced by 575,000 mt based on signed contracts confirmed by the USDA committing Mexico to ship to non-U.S. destinations in that amount in 2014/15.

The U.S. 2013/14 cane sugar production is lowered by 25,000 short tons, raw value (STRV), based on a slow harvest pace in Hawaii. Tariff-rate quota (TRQ) shortfall for 2013/14 is increased by 87,547 STRV and 2013/14 imports from Mexico are increased by 58,423 STRV for a net import reduction of 29,000 STRV. For 2014/15, beginning stocks are reduced 54,000 STRV, cane sugar production is increased by 116,000 based on processors’ reporting, and imports from Mexico are reduced by 672,000 STRV to 1.205 million. With no other changes, ending stocks are projected at 837,000 STRV.

Mexico Sugar Supply and Use

Beginning stocks for 2013/14 remain unchanged from July. Production in Mexico is reduced by 5,000 metric tons (mt) to 6.020 million mt based on end-of harvest reporting by Comité Nacional Para El Desarrollo Sustentable de la Caña de Azúcar (Conadesuca).

Production for 2014/15 is projected at 6,140 million mt. This amount is based on the same area harvested in 2013/14 and uses a 6-year average sugar per hectare yield on a factory-by-factory basis.

Figure 2 shows Mexico’s sugar area harvested and the sugar yield for 2000/01 through projected 2014/15. With regard to area harvested, there are three distinct periods. The first is the 2000/01 through 2003/04 period with lower area harvested, followed by 2004/05 through 2011/12 with slightly higher area harvested and then by 2012/13 through projected 2014/15 with markedly higher area harvested. The sugar yield over time shows no real trend and varies greatly from year to year.

The USDA projects no changes to imports for 2013/14. Deliveries are reduced 106,000 mt to 4.200 million mt based on slowing deliveries as indicated by Conadesuca data through June.

Figure 3 shows that total 9-month sweetener consumption (October-June) is off 8.277 percent relative to 2012/13. The USDA thinks that this amount is extreme and assumes that sweetener use will be off by just 5 percent. This reduction is thought to be due mostly to reported reductions in consumption of soft drinks and packaged sweets because of the Mexican Government’s anti-obesity efforts and also possibly from sweetener consumption taxes. HFCS is set to reach the USDA forecast of 1.360 mt, dry basis. This implies total sugar consumption of approximately 4.200 million mt for 2013/14.

The USDA is making no adjustment to consumption in 2014/15.The USDA is increasing exports for 2013/14 by 50,000 mt based on pace-to-date exports to the United States. Ending stocks are increased as a residual by 51,000 mt to 714,000 mt, representing a stocks-to-consumption ratio of 17.0 percent, well below the 22.0 percent considered optimal for meeting consumption for the first quarter of the next marketing year. Due to the slightly higher ending stocks compared with July, imports for 2014/15 are decreased by 51,000 mt to 399,000 mt so that sugar equaling 2.5 months of consumption is available prior to the full start of next year’s production cycle.

Ending stocks for 2014/15 remain unchanged at 947,000 mt, representing 22.0 percent of consumption. Exports for 2014/15 remain unchanged in total, but the amount to be exported to the United States is reduced by 575,000 mt based on signed contracts confirmed by the USDA committing Mexican shipments to non-U.S. destinations in that amount.

United States Sugar Supply and Use

For the 2013/14 marketing year, there is no adjustment in beginning stocks of sugar for the United States. Cane sugar production from Hawaii is reduced 25,000 short tons, raw value (STRV) to 165,000 STRV based on a slow harvest pace. Imports to the United States are decreased by 29,000 STRV. This amount comes from two sources. The first comes from tariff-rate quota (TRQ) imports, which are reduced by 87,547 STRV from an expected shortfall based on reporting from and analysis by the USDA’s Foreign Agricultural Service (FAS). The second is based on an increase in imports from Mexico of 58,423 STRV based on pace-to-date imports.

Deliveries remain unchanged at 11.700 million STRV. Exports also remain unchanged. Ending stocks are calculated residually at 1.754 million STRV, a reduction from last month of 54,000 STRV. This implies a stocks-to-use ratio of 14.07 percent.

USDA’s National Agricultural Statistics Service (NASS) completed its first production forecast for sugarbeets and sugarcane on August 12, 2014.2 Total production of sugarbeets for 2014/15 is forecast below the last 2 years’ at 30,122 tons. The regional breakdown of production is shown in figure 4. Sugarcane production for 2014/15 is also forecast lower overall than in prior years (with the exception of in Florida), as shown in figure 5. The Interagency Commodity Estimates Committee (ICEC) for sugar projects 2014/15 sugarcane for sugar at 27.739 million tons.

Beginning stocks for 2014/15 are decreased by 54,000 STRV due to changes in supply and use for 2013/14. Cane sugar production increased by 116, 000 STRV based on processors’ reporting. Processors in Florida report an increase of 5,000 to 1.785 million STRV, Louisiana processors report an increase of 120,000 to 1.5 million STRV, and Texas processors report a decrease of 9,000 to 126,000 STRV.

Imports from Mexico are reduced by 672,000 STRV to 1.205 million STRV. There are no changes to other imports, and therefore total imports equal 2.877 million STRV. There are no forecast changes in deliveries and exports for 2014/15. Ending stocks are calculated residually at 837,999 STRV, a reduction from July of 610,000 STRV. The implied stocks-to-use ratio is 6.9 percent.

Published by USDA Economic Research Service

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