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USDA GAIN: Oilseeds, Cotton, Sugar, Grain and Feed


27 April 2012

USDA GAIN: Nicaragua Sugar Annual 2012USDA GAIN: Nicaragua Sugar Annual 2012

In the 2011/2012 season, the Nicaraguan sugar cane production reached over 603,727.27 MT, an 18 percent increase compared to the previous year. For FY 2012, Nicaragua plans to ship its full U.S. WTO and DR-CAFTA quota allocation. If there is any sugar reallocation, Nicaragua could supply up to 30,000 MT.
USDA GAIN Report - Oilseeds, Cotton, Sugar, Grain and Feed

Commodities:

Sugar, Centrifugal

Production:

Sugarcane is produced in the pacific coast of Nicaragua. The Nicaraguan sugarcane harvest runs from November through May. The main sugar mills are; San Antonio, Monte Rosa, Benjamin Zeledon and Montelimar.

Preliminary data from the Nicaraguan Sugar Commission (NSC), reports a total sugarcane production of 6,068,831.80 MT in the 2011/2012 season, an 18 percent increase compared to the previous year. This is attributed to a 9 percent increase in planted areas and an 8 percent increase in yields due to the favorable climatic conditions of 2011. In the 2011/2012 season, the sugar industry expects a total production of 603,727.27 MT from which 272,727 MT will stay in the domestic market and 331,000MT will go to the export market.

In 2011, the largest Sugar Mill of Nicaragua, Ingenio San Antonio (ISA), went back to ethanol production. ISA produced 10,000,000 liters which will be exported to the U.S. in 2012. If the international oil prices continue high, there is a great chance ISA will increase its production in 2012/2013. ISA is the only sugar mill in Nicaragua which has an ethanol facility. At the moment, ISA is only processing ethanol out of molasses.

In addition to the sugar and ethanol production, Nicaragua produced 188,000 MT of molasses in 2011/2012, from which 52 percent went to the export market (mainly to Costa Rica for ethanol production) and the rest stayed in the country. In the domestic market, molasses is mostly used for animal feeds.

2011/2012 Production by Main Sugar Mills Total Sugar Production: 603,727.27 MT

For the 2012/2013 season, NSC expects a total sugar cane production of 618,182 MT, a 2 percent increase compared to the 2011/2012 season. However, by 2015 NSC expects a 20 percent increase production, reaching over 735,924 MT.

Crop Area:

During the 2011/2012 season, 59,256 hectares of sugarcane were planted, a 9% increase compared to the 2010/2011 season. The increase in planted areas was mainly on the western side of the country, in the cities of Leon and Chinandega, which are excellent for sugar cane production.

During the last years, sugar cane producers have experience land competition from peanut producers on the western side of the country, especially in the cities of Leon and Chinandega. In 2011, peanut plantations occupied 42,253 ha. From this area, 82 percent of production is concentrated on the west. An increase in peanut plantations could affect the expansion plans of the sugar industry.

For 2012, peanut production in Nicaragua is expected to decrease due to a high peanut production forecasted in the United States which could result on an excess supply on the main Nicaraguan export markets. This should facilitate access to land for sugar cane producers.

For the 2012/2013 season, NSC expects a small increase of 88.83 HA in sugar cane plantations. However, in midterm (by 2015) sugar cane plantations are expected to increase in 20 percent. This is due to Montelimar and Benjamin Zeledon’s plan to double sugar cane productive areas by 2015. The increase in sugar plantations will be mainly on the south-west side of the country where sugar cane does not face competition from peanut production.

Yields:

For the 2011/2012 season, the average yield per hectare reached over 102.41 MT, an 8 percent increase compared to the previous cycle. This is attributed to the favorable climatic conditions in 2011. In the 2010/2011 season, sugar cane plantations were affected by high levels of rain resulting in lower yields. NSC expects to keep yields above 95 metric tons per hectare, assuming good weather conditions in the 2012/2013 season.

Sugar Cane Production in MT for the Last 5 Years

Consumption:

In 2011, the Sugar Trading Company of Nicaragua (STCN) estimated a sugar per capita consumption of 94.07 lbs per year, similar to previous years. STCN expects a stable consumption in the short term. According to STCN, the increase in sugar consumption in the last years has been attributed to an increase in the population and not to a change in food habits of the Nicaraguan people.

Trade:

Major export destinations in 2011 include the United States, Venezuela, South Korea, Canada and Mexico. In 2011, Nicaraguan sugar exports reached to 272,683 metric tons with a total value of U$ 156.3 million. In 2011, the Nicaraguan sugar exports to Venezuela increased in 59 percent compared to 2010. Please refer to table below.

The FY 2012 U.S.WTO raw sugar allocation for Nicaragua totaled 22,540 Metric Tons Raw Value (MTRV). In addition to this, Nicaragua has a 24,640 MT sugar quota under the CAFTA-DR free trade agreement. On February, 2012, the president of the Sugar Commission of Nicaragua informed post that Nicaraguan plans to ship its full FY 2012 U.S. WTO sugar allocation as well as the DR-CAFTA quota. If there is any sugar reallocation, Nicaragua could supply up to 30,000 MT.

Policy:

The Government of Nicaragua does not set sugar prices, nor does it provide subsidies or special credit programs. Nicaragua lacks a legal framework that would support the consumption of bio-fuels, inhibiting the commercialization of ethanol domestically.

Marketing:

The private sector of Nicaragua buys and sells all sugar. Sugar for national consumption is fortified with vitamin A and packaged in bags of 0.4, 0.8, and 2 kg.

The NCSP reported the following wholesale and retail prices for refined and white plantation sugar in 2011.

April 2012

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