USDA shares sugar outlook
The U.S. is among the world’s largest sugar producers. Unlike most countries, the U.S. has large and well-developed industries for both sugarcane and sugarbeets. Since the 1990s, sugarcane and sugarbeets have accounted for about 45 percent and 55 percent, respectively, of domestic sugar production.
The U.S. Department of Agriculture (USDA) Economic Research Service (ERS) monitors developments in the sugar market and provides a range of data products and reports covering domestic and international supply, demand, trade and prices.
Sugar and sweeteners outlook
In the USDA’s March 2023 Sugar and Sweeteners Outlook, compiled by Coordinator Vidalina Abadam, the 2022-23 U.S. total sugar supply has declined by 54,000 short tons, raw value (STRV) to 14.460 million from last month as larger sugar production – a new record if realized – is offset by lower imports.
The decrease in imports is mainly driven by the 172,000-STRV increase in higher-tier imports to 156,000. Additionally, sugar delivered for human consumption has increased 100,000 STRV to 12.6 million.
Total use has increased by the same amount to 12.705 million STRV. Ending stocks fell by 154,000 to 1.720 million for an ending stocks-to-use ratio of 13.5 percent, down 1.3 percentage points from last month’s 14.8 percent.
Mexico’s sugar production in 2022-23 has declined 415,000 metric tons (MT) actual value from last month to 5.485 million, due to lower expectations for sugarcane yields and sucrose recovery.
USDA forecasts low polarity sugar production has the potential to be between 784,000 and 805,200 MT, about 70 to 72 percent of the revised Mexican export quota – equivalent to 1.118 million MT.
Fulfilling the remaining portion of the quota allocated for refined sugar implies reduction in sugar deliveries to the Mexican market and ending stocks.
Sugarbeet production
Sugarbeet production in 2022-23 has increased by 60,000 STRV to 5.160 million from February on an increased forecast of sucrose recovery based on processors’ August through January data reported in the USDA’s Farm Service Agency Sweetener Market Data (SMD).
If realized, the updated forecast would surpass last year’s 5.155 million STRV and would be the second largest production behind 2017-18’s 5.270 million.
Also based on the SMD, cane sugar production is up by 19,000 STRV to 4.150 million from last month – a new record exceeding 2020-21’s 4.142 million – as the 30,000-STRV combined increase in Florida and Louisiana countered the 11,000-STRV decrease in Texas.
In total, sugar production is raised by 79,000 STRV from last month to a record-high of 9.310 million, surpassing 2017-18’s 9.293 million.
Total imports in 2022-23 are lowered by 134,000 STRV to 3.330 million from last month as the anticipated 172,000-STRV reduction of imports from Mexico to 1.306 million countered the increased forecast for high-tier tariff imports and the 2021-22 World Trade Organization raw sugar tariff-rate quota (TRQ) imports.
High-tier tariff imports have increased by 31,000 STRV to 156,000 from February due to larger-than-expected entries of refined sugar paying the high-duty. The raw sugar TRQ imports are up 7,000 STRV to 1.153 million on an upward revision in imports under the extended 2021-22 raw sugar which arrived by the end of 2022.
Improved outlook for beet sugar production
Sugarbeet production in Fiscal Year (FY) 2022-23 has increased by 60,000 STRV to 5.160 million from February, exceeding last year’s 5.155 million to become the second largest production behind 2017-18’s 5.270 million.
The increase is driven by the higher sucrose recovery forecast for the crop year, from 15.2 percent to 15.4 percent.
This recovery, which is based on the SMD August through January processors data, would set a record in the last decade. It is driven by above-average recovery rates observed across most of the major sugarbeet-producing regions.
Given the bullish tone generated by the March World Agriculture Supply and Demand Estimates’ (WASDE) outlook for tight supplies and increased demand, the Sosland Sweetener Report predicts the booking share of the 2023-24 business would rise to 75 percent before the spring planting gets under way in April.
Sugar prices to remain firm
After being unquoted since the first week of December 2022 due to lack of spot supplies, the nominal price for the 2022-23 Midwest refined beet sugar is again published at 60 cents per pound by the Sosland report during the week of Feb. 22.
This is about 16 to 18 cents per pound higher – about 37 to 39 percent – than the same time last year. Sosland notes most of the spot beet sugar supplies are only available from distributors since beet processors have already contracted all of their 2022-23 supplies.
As of Sosland’s March 8 report, quoted prices ranged between 52.5 to 55 cents per pound. This is high considering beet sugar prices averaged between 35 to 36 cents per pound before the force majeure incidents occurring in late 2019.
The quoted 2022-23 Northeast refined cane sugar price for spot supplies is 62 cents per pound freight on board. This is 10 cents or 19 percent higher than this time last year.
For Calendar Year 2024, the prices offered are lower – between 57 to 57.5 cents per pound, but are relatively high by historic standards similar with the beet sugar price.
Support for the beet sugar price has also come from the recent uptick in the U.S. Number 16 nearby – May 2023 – raw cane sugar prices, which closed at 38.3 cents per pound as of March 9, a level not seen since early 2011.
Subsequent contracts also closed at relatively high levels – July and September at 38.3 cents and November through May 2024 at 37 cents.
The increase in the Number 16 price is likewise attributed to the higher trading volume following the less optimistic market outlook industry participants gathered from the International Sugar Colloquium and March WASDE.
Buyers likely increased bookings to lock in contracts early and hedge against supply uncertainty and potentially higher prices later in the year.
The Number 16, in turn, is being partly supported by the world Number 11 raw cane sugar nearby prices – March 2023, which has since expired – posting a six-year high of 22.36 cents per pound amid expectations of lower production and exports from major producing countries such as India, Thailand and the European Union.
To view the most recent report, visit ers.usda.gov and click on the “Topics” tab, then click “Crops” and “Sugar and Sweeteners.” Here one can find a variety of information on periodic and scheduled ERS publications and data on sugar and sweeteners.
Brittany Gunn is the editor of the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.
