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USDA Sugar and Sweeteners Outlook

20 November 2014

USDA Sugar: World  Markets and Trade - 20 November 2014USDA Sugar: World Markets and Trade - 20 November 2014

USDA Sugar and Sweeteners Outlook

Global sugar production for 2014/15 is estimated down 2.6 million metric tons (raw value) at 172.5 million on reductions in Brazil, Thailand, and China. Global imports are expected to remain flat while consumption is projected to reach a record 171.0 million tons as ending stocks shrink slightly. 
2014/15 Sugar Overview

United States production is estimated unchanged from last year at 7.7 million tons. Stocks are expected to fall over 20 percent as consumption holds steady and imports decline to 3.1 million tons. On October 27, 2014, the Department of Commerce announced its affirmative determination in the anti-dumping investigation of sugar imported from Mexico. Commerce set dumping margins on sugar from Mexican sugar processors ranging from 39.54 percent to 47.26 percent. These preliminary duties come after the agency imposed preliminary countervailing duties in August ranging from 2.99 to 17.01 percent on sugar derived from sugarbeets and sugarcane. As a result of the determination, U.S. Customs and Border Control will require cash deposits on sugar products covered under the investigation. 

Also on October 27, the department announced a draft agreement with the Government of Mexico to suspend the anti-dumping and countervailing duty investigations. The terms of the agreement include:

• Required export licenses for sugar to enter the United States from Mexico.

• Minimum reference prices of 23.57 cents per pound for refined sugar and 20.75 cents per pound for all other sugar.

• Export limits, based on a formula to determine expected U.S. needs for imported sugar 
The estimates provided in specific WASDE reports would provide the data to calculate the quantities to determine Mexican market access.

• Limits on the amount of refined sugar that can enter the United States under the suspension agreement. 

• Limits on the timing of shipments—specifically, the amount of sugar that could be shipped prior to December 31 and March 31 of the marketing year.

Interested parties were asked to provide comments on the draft agreement until November 18, 2014. The investigations would be suspended upon a final agreement. If an agreement is not reached, the anti- umping and countervailing duty investigations would continue and the preliminary duties would remain in place. The Mexican supply and use forecasts provided in the November WASDE do not reflect market conditions that would take place under the draft agreement, as those terms were not finalized and signed at the report’s release.

Brazil’s production is estimated to ease 2.0 million tons to 35.8 million as drought conditions lower yield and a lower percentage of the sugarcane (estimated 45 percent) is diverted to sugar, compared to last year on better profitability for ethanol production. Consumption is expected to increase slightly reflecting population growth and expansion in the food processing sector. Exports are projected down 2.2 million tons to 24.0 million on lower exportable supplies. 

Thailand’s production is forecast to decline 1.1 million tons to 10.2 million as drought conditions lower yield. Exports are forecast to jump to a record 8.5 million tons as stocks are drawn down to meet high Asian demand, particularly from Indonesia and Cambodia. Consumption continues to trend higher, driven by rising industrial use.

India’s production is estimated to increase over 600,000 tons to 27.3 million due to increased yields. With high demand, imports are expected to expand as consumption rises to a record 27 million tons. India is the largest consumer and second largest producer of sugar and imports vary greatly from year to year. Exports are estimated to fall to 1.5 million tons.

Production in the European Union is estimated at 16.3 million tons, up nearly 300,000 on both increased sugar beet area and yield. As consumption continues to trend higher, imports are projected to grow 200,000 tons to 3.5 million tons. Exports remain at 1.5 million tons, limited by the sugar export ceiling in the World Trade Organization.

China’s production is projected at 13.3 million tons, down nearly 1.0 million on lower yield. Rising consumption, which outpaces production, and lower imports are expected to draw down stocks.

Mexico’s production is estimated slightly higher at 6.5 million tons. Exports are projected down nearly 50 percent to 1.8 million tons on consumption and stock growth of 5 and 10 percent, respectively.

Australia’s sugar production is estimated to increase 200,000 tons to 4.6 million based on a combination of higher sugar yields and an increase in area. Australian sugar exports are estimated over 5 percent higher at 3.5 million tons on higher exportable supplies as consumption remains relatively flat.

Russia’s production is expected down 200,000 tons to 4.2 million as an increase in area is offset by reduced yield. Consumption is estimated to increase as imports swell to fill the gap of lower production.

Selected 2013/14 Revisions from May Forecast:
- Global production is down slightly (694,000 tons) to 175.0 million.

o India is revised down 440,000 tons to 26.6 million as more cane was used for
non-centrifugal sugar.

o Mexico is lowered 349,000 tons to 6.4 million due to adverse wet weather.

- Global imports are raised 1.4 million tons to 51.8 million.

o India expanded 750,000 tons to 850,000 tons as imports rose to meet domestic

o China is revised up 430,000 tons to 4.3 million on growing demand.

Published by USDA Economic Research Service

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