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USDA Sugar and Sweeteners Outlook


17 October 2014

USDA Sugar and Sweeteners Outlook - 17 October 2014USDA Sugar and Sweeteners Outlook - 17 October 2014


USDA Sugar and Sweeteners Outlook

U.S. 2013/14 sugar tariff-rate quota (TRQ) imports are reduced by 72,000 short tons, raw value (STRV) based on end-of-year reporting by the U.S. Customs Service. Imports from Mexico are decreased by 12,000 STRV based on a Foreign Agricultural Service (FAS) forecast of 2.124 million with almost all import data in for the fiscal year. Texas cane sugar production is reduced by 2,000 STRV based on revised processor data. For 2013/14, there are no other changes; therefore, ending stocks are reduced by a total of 86,000 STRV to 1.810 million, implying an ending stocks-to-use ratio of 14.5 percent.

For 2014/15, imports from Mexico are increased by 461,000 STRV to 1.549 million. Beet sugar production is increased 170,000 STRV to 4.970 million based on analysis of National Agricultural Statistics Service (NASS) crop forecasts. Cane sugar is reduced 19,000 STRV to 3.572 million based on processors’ reporting. As a residual, ending stocks are increased by 526,000 STRV to 1.554 million for an ending stocks-to-use ratio of 12.8 percent, up 4.3 percentage points over last month.

For Mexico in 2013/14, imports are reduced by 96,000 metric tons (MT), all of which were intended for Mexico’s re-export program (IMMEX) for sugar-containing products. In a mostly parallel adjustment in use, deliveries to the IMMEX are reduced by that same 96,000 MT, plus 10,000 MT from reductions in domestic sourcing, based on pace to date. Deliveries for consumption are reduced by 50,000 MT after a fall-off in late-season domestic shipments. Total deliveries are, therefore, decreased by 156,000 MT. Based on U.S. import data and the FAS forecast, exports to the United States are decreased by 11,000 MT. Based on adjustments to data, exports to third-country destinations are increased by 1,000 MT (681,000 total), and production is increased by 1,000 MT (6.021 million total). These changes imply ending stocks at 685,000 MT, for a stocks-to-consumption ratio of 16.5 percent.

For 2014/15, total Mexico supply is increased by 71,000 MT in beginning stocks. Deliveries for consumption are decreased by 52,000 MT in line with the reduction made for 2013/14. Ending stocks are still forecast at 22 percent of consumption for an 11,000 MT reduction to 936,000 MT. Because total exports are forecast as a residual, their change is equal to the sum of the other changes (positive for supply, negative for use), or 134,000 MT, for a total of 1.650 million. Exports to non-U.S. destinations based on contracts are reduced by 260,000 MT to 325,000. FEESA, the entity that runs the nine Governmentowned mills in Mexico, announced that it had renegotiated one earlier contract and is committed to export 40,000 MT instead of the earlier negotiated 300,000 MT. As a consequence, exports to the United States are residually calculated at 1.325 million MT, up 394,000 MT.

Mexico Sugar Supply and Use

Beginning stocks for 2013/14 remained unchanged for September. Mexican sugar supply-and-use estimates for 2012/13-2013/14 and projected 2014/15 are shown in table 1. Production is increased by 1,000 metric tons (MT) for 2013/14 due to a data revision by Comité Nacional Para El Desarrollo Sustentable de la Caña de Azúcar (Conadesuca). Imports decline 96,000 MT based on pace to date to 130,000 MT. Imports for consumption are kept at 10,000 MT, but imports for IMMEX, Mexico’s sugar-containing product re-export program and other uses, was reduced by the full 96,000 MT to 120,000 MT.

Total deliveries for 2013/14 decline by 156,000 MT to 4.428 million MT. Deliveries for consumption are reduced by 50,000 MT based on pace-to-date analysis to 4.150 million MT. Consumption of high fructose corn syrup (HFCS) is on pace to meet the 1.360 million MT, dry weight, forecast. Deliveries for IMMEX and other uses decline by 106,000 MT based on fewer imports for IMMEX (see above at 96,000 MT) and a reduced 10,000 MT pace-to-date estimate of domestic shipments being made to IMMEX. Deliveries for IMMEX are now estimated at 278,000 MT.

Exports are reduced by 10,000 MT to 2.498 million MT. FAS estimates 2013/14 sugar imports from Mexico at a commercial, or actual weight, basis of 1.818 million MT. This estimate is adopted as the Mexican export total to the United States. Conadesuca data through September 5 indicates that Mexico has exported 680,730 MT to other destinations. Because no known ships containing sugar have left Mexican ports since this estimate was made, it is considered final. The two destination totals sum to the 2.498 million MT.

Ending stocks for 2013/14 are calculated residually at 685,000 MT. This represents an increase of 71,000 MT. The ending stocks-to-consumption ratio is 16.5 percent, up from 14.6 percent in August.

Beginning stocks for 2014/15 are increased by 71,000 MT to 685,000 MT, consistent with the increase in ending stocks from 2013/14. There is no predicted change in production for 2014/15. The area harvested is assumed to be consistent with 2013/14. Average sugar cane yield is assumed, as well as a return to trend for sucrose recovery levels.

There is no change in imports for 2014/15. The change to 2013/14 imports for IMMEX is not carried over to 2014/15. Analysts await additional data and analysis from Mexico before revising subsequent forecasts.

Deliveries are decreased by 52,000 MT to 4.638 million MT. Deliveries for consumption decreased by the entire 52,000 MT in line with the reduction made for 2013/14 . Deliveries for IMMEX and other uses are unchanged pending further analysis when more data is made available.

Ending stocks are 936,000 MT. This represents an 11,000 MT reduction. which leaves the ending stocks-to-use ratio at 22.0 percent. Exports are then calculated residually at 1.650 million MT, an increase of 134,000 MT from last month. The increase is based on higher beginning stocks (71,000 MT), decreased deliveries (52,000 MT), and lower ending stocks (11,000 MT).

Exports to non-U.S. destinations based on contracts are reduced by 260,000 MT to 325,000 MT. FEESA, the entity that runs the nine Government-owned mills in Mexico, announced that it had renegotiated one of its earlier contracts and now is committed to export 40,000 MT instead of the earlier negotiated 300,000 MT.As a consequence, exports to the United States are residually calculated at 1.325 million MT, up 394,000 MT. The increase is, therefore, about one-third due to the increase in total exports and two-thirds due to the renegotiated contract.

U.S. Sugar Supply and Use

There is no change in beginning stocks for the United States in 2013/14. Production is down 2,000 short tons, raw value (STRV) based on revised data from Texas sugar cane producers. Total imports are down by 84,000 STRV to 3.703 million STRV. Imports from Mexico are down by 12,000 STRV based on FAS analysis of preliminary trade data. Tariff-rate quota (TRQ) imports are down 72,000 STRV based on data from U.S. Customs, collected by FAS.

Deliveries for 2013/14 remain unchanged. There has been a strong pace through 11 months, but the final month’s direct consumption imports may not be high enough to warrant an increase, mostly due to weak imports from Mexico. There is no change in exports. Ending stocks are calculated residually at 1.812 million STRV, a decrease from last month of 86,000 STRV. The implied stocks-to-use ratio is at 14.5 percent, reduced from 15.2 percent in September.

Beginning stocks for 2014/15 are decreased by 86,000 STRV, consistent with 2013/14 ending stocks. Beet sugar production is increased by 170,000 STRV to 4.970 million based on analysis by the National Agricultural Statistics Service (NASS) crop forecasts. Cane sugar is reduced by 19,000 STRV to 3.572 million STRV based on processors’ reporting.

Imports are increased by 461,000 STRV to 3.336 million STRV. This change is entirely attributable to the increase in imports from Mexico. Total imports from Mexico are forecast at 1.549 million STRV. Deliveries and exports for 2014//15 remain unchanged. Ending stocks are calculated residually at 1.404 million STRV, an increase over last month of 377,000 STRV. The implied stocks-to-use ratio is 12.8 percent, a 4.3 percentage point increase over last month.

The USDA’s Commodity Credit Corporation (CCC) announced on September 26 the loan rates for 2014 crop sugar, as required by the 2014 Farm Bill. The 2014 crop national average loan rate is set at 18.75 cents per pound, raw cane sugar, and 24.09 cents per pound, refined beet sugar. These rates are the same as last year. The national loan rates are adjusted by region to allow for marketing cost differentials. The CCC also announced the initial 2015 overall sugar marketing allotment, which is 9,987,500 STRV. The overall sugar marketing allotment is 85 percent of the estimated human consumption for the crop year, as found in the September 2014 World Agricultural Supply and Demand Estimates report. Of the overall sugar marketing allotment, 54.35 percent is distributed to sugar beet processors and the remaining 45.65 percent goes to the sugarcane States and processors.

Published by USDA Economic Research Service

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