20171218-USDA-Sugar_and_Sweeteners_Outlook_17页_2mb

Sugar and Sweeteners Outlook Summary

Core Content Overview

This report provides an analysis of the U.S. and global sugar and sweeteners market outlook for the 2017/18 fiscal year, highlighting production, import, export, and consumption trends. The U.S. domestic sugar production is projected to reach a record level, while Mexico's sugar market is expected to see increased ending stocks due to reduced exports to the U.S. The global sugar market is anticipated to shift from a deficit to a surplus, driven by increased production in major countries like Brazil, India, and the European Union.

Key Highlights

U.S. Sugar Production and Imports

• Domestic Sugar Production: Increased by 409,000 STRV to 9.245 million STRV, the highest level since the 2016/17 season. This is due to higher sucrose recovery rates from beet sugar processors.
• Cane Sugar Production: Remains unchanged at 3.886 million STRV.
• Imports: Reduced by 384,000 STRV to 3.326 million STRV, with Mexico imports decreasing by 426,000 STRV to 1.268 million STRV.
• Imports from Quota Programs: Increased by 42,000 STRV to 1.798 million STRV.
• Ending Stocks: Projected to be 1.802 million STRV, a 27,000 STRV decrease from the previous month.
• Stocks-to-Use Ratio: At 14.3%, slightly tighter than the 14.8% in the previous year.

Mexico Sugar Market

• Ending Stocks: Increased by 183,000 MT to 1.008 million MT.
• Exports to the U.S.: Reduced by 365,000 MT to 1.085 million MT, in line with the Export Limit from the U.S. Department of Commerce.
• Exports to Other Countries: Increased by 121,000 MT to 131,000 MT.
• Domestic Deliveries for Human Consumption: Unchanged at 4.582 million MT.
• IMMEX Deliveries: Increased to 390,000 MT, reflecting improved supply availability.

Global Sugar Market Outlook

• Production and Consumption: Both are projected to reach record levels in 2017/18.
• Global Consumption: Expected to increase by 1.5% to 174.2 million MTRV.
• Global Production: Projected to rise by 4.6% to 184.9 million MTRV.
• Global Ending Stocks: Up 1.4% from 2016/17, indicating a transition to surplus.

Main Points

• U.S. Beet Sugar Production: Driven by higher sucrose recovery rates, beet sugar production is expected to hit a record level.
• U.S. Cane Sugar Production: Remains stable, with no significant changes in state-level forecasts.
• Mexico's Sugar Supply: Improved due to lower exports to the U.S., and higher domestic availability.
• Global Sugar Market: Shifts toward surplus, with Brazil, India, and the EU leading the production increase.
• Brazil's Sugar Market:
  • A key driver of global sugar supply.
  • Increased sugarcane use for sugar production over ethanol, due to better market returns.
  • Ethanol Policy: A new 600 million liter tariff-free quota on U.S. ethanol imports, potentially affecting domestic ethanol prices.
• India's Sugar Market:
  • Projected to increase by 25%, with good weather and improved financial conditions supporting production.
  • Expected to remain a net importer, not a major exporter, despite the production increase.
• EU Policy Changes:
  • Eliminated production quotas and export limits for sugarbeet, leading to potential production expansion in more productive regions.

Key Information

• Fiscal Year 2017/18: The U.S. domestic sugar production is expected to be a record, with beet sugar accounting for most of the increase.
• Imports from Mexico: Reduced to 1.268 million STRV, matching the Export Limit set by the U.S. Department of Commerce.
• Global Production Surplus: The global sugar market is projected to move from a deficit to a surplus, with Brazil as the largest producer and exporter.
• Sugarbeet Crop Forecast: The 2017/18 crop is the second-largest in U.S. history, behind the 2016/17 record.
• Stocks-to-Use Ratio:
  • U.S.: 14.3%.
  • Mexico: 22.0%.
• Market Factors:
  • Weather Conditions: Critical for maintaining sucrose levels in sugarbeet.
  • Trade Agreements: Impact import and export levels, particularly between the U.S. and Mexico.
  • Ethanol Prices: Influence the proportion of sugarcane used for sugar versus ethanol production.

Conclusion

The U.S. and global sugar markets are experiencing positive trends in production and supply, with record beet sugar output and a global surplus anticipated in 2017/18. The reduction in Mexican exports to the U.S. is largely due to suspension agreements and increased domestic supplies, which also contribute to higher ending stocks in Mexico. Policy changes, particularly in Brazil and the EU, are playing a significant role in shaping the global sugar market, with Brazil remaining the central player due to its production and export dominance.