20161215-USDA-USDA_Sugar_and_Sweeteners_Outlook_2016.12.15_16页_1mb

Sugar and Sweeteners Outlook Summary

Core Content

The Economic Research Service (ERS) of the U.S. Department of Agriculture (USDA) released the Sugar and Sweeteners Outlook (SSS-M-340) on December 15, 2016, with the next release scheduled for January 19, 2017. The report outlines projections for U.S. and global sugar supply, use, and trade, including the impact of the U.S.-Mexico suspension agreements and the IMMEX program.

U.S. Sugar Outlook

• Total U.S. sugar supplies for 2016/17 are projected at 14.092 million short tons, raw value (STRV), an increase of 14,000 STRV from the November report.
• Domestic production is expected to rise by 11,000 STRV, reaching 9.342 million STRV, which would be a record level.
• Imports are projected to increase by 5,000 STRV, totaling 2.696 million STRV, with Mexico imports decreasing by 45,000 STRV to 972,000 STRV.
• Beginning stocks are revised down slightly to 2.054 million STRV.
• Total use remains at 12.180 million STRV, with a stocks-to-use ratio of 15.7%.
• Ending stocks are forecast at 1.912 million STRV, a 14,000 STRV increase from the previous month.

Production Breakdown

• Beet sugar production is projected at 5.371 million STRV, up from the previous year and the highest since 2015/16.
• Cane sugar production is expected to increase to 3.971 million STRV, driven by improved conditions in Hawaii and Texas.
  • Hawaii production is up by 6,000 STRV to 46,000 STRV.
  • Texas production is up by 5,000 STRV to 140,000 STRV.
• Florida and Louisiana cane sugar production remain unchanged at 2.142 million STRV and 1.644 million STRV, respectively.

Mexico Sugar Outlook

• Mexico sugar production for 2016/17 is projected at 6.371 million metric tons, actual value (MT), a 71,000-MT increase from the November report.
• The first official production forecast from Mexico's Conadesuca indicates a 4.2% increase compared to 2015/16, due to an increase in harvested area from 779,000 hectares to 808,218 hectares.
• Imports are projected to be 10,000 MT, unchanged from the previous month.
• Total supply is expected to be 7.418 million MT, a 71,000-MT increase from November.
• Exports are projected at 1.470 million MT, with U.S. exports reduced to 832,000 MT due to the Export Limit carried over from the September calculation.
• Ending stocks for Mexico are forecast at 1.229 million MT, a 8,000-MT decline from the previous month.
• The stocks-to-consumption ratio is projected at 28.0%, up from 27.8%.

Global Sugar Outlook

• Global sugar production for 2016/17 is projected at 170.9 million MT, a 3.1% increase from 2015/16.
• Global consumption is expected to rise to 173.6 million MT, a 0.6% increase from the previous year.
• Global stocks-to-use ratio is projected to decline to 17.7%, the lowest in over 20 years, due to production lagging behind consumption.
• World raw sugar prices have been increasing due to tighter global supplies compared to years of production surpluses.

Key Factors Affecting Supply and Demand

• Cold weather in December is expected to help sugarbeet storage and sucrose retention.
• Legislative changes in the U.S. to establish a national labeling standard have improved beet sugar deliveries.
• IMMEX program regulations in Mexico have disrupted trade flows, making U.S. sugar exports ineligible for duty-free benefits.
• U.S. Needs fell below the Export Limit, so the limit was carried over from the September level.
• Mexican sugar imports into the U.S. are projected to decrease due to lower U.S. Needs and regulatory changes.

Summary of Key Projections

Additional Notes

• U.S. sugarbeet harvest is nearly complete, with 98% harvested by the end of November.
• Sugarbeet yields are at or near record levels in major producing states.
• Processor reports indicate lower sugar recovery rates for sliced beets, but increased field yields are offsetting this.
• Mexican sugar imports for the U.S. re-export program are expected to increase due to shipments registered after October 1.
• Mexico's IMMEX program is expected to rely on domestic supplies for exports, not foreign imports.
• Weather conditions and disease outbreaks have affected sugar content in some regions, but overall production remains strong.