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Sugar and Sweeteners Outlook Summary (April 2018)

Core Content Overview

This report provides an analysis of the U.S. and Mexico sugar and sweeteners markets for the 2017/18 fiscal year, highlighting production, supply, use, and price trends.

U.S. Sugar Outlook

Production Projections

• Total U.S. sugar production for 2017/18 is projected at 9.140 million short tons (STRV), a 99,000 STRV reduction from the previous month's forecast.
• Beet sugar production is expected at 5.139 million STRV, down 80,000 STRV due to lower sucrose recovery from sliced sugarbeets.
• Cane sugar production is projected at 4.001 million STRV, down 19,000 STRV, primarily due to reduced production in Florida from Hurricane Irma and a wet rainy season.
• Despite the reductions, the total production is still expected to be a record level for the U.S. sugar market.

Supply and Use

• Total supply for 2017/18 is projected at 14.489 million STRV, with total use at 12.630 million STRV.
• Domestic deliveries for food and beverage use are expected at 12.325 million STRV, a 1.8% increase over the previous year.
• Ending stocks are projected at 1.859 million STRV, down 94,000 STRV from the March forecast, resulting in a stocks-to-use ratio of 14.7%.

Imports

• Total sugar imports for 2017/18 are projected at 3.472 million STRV, up 5,000 STRV from the previous month.
• Tariff-rate quota (TRQ) imports are expected at 1.788 million STRV, while non-program imports are projected at 1.284 million STRV.
• Imports from Mexico are expected at 1.269 million STRV, unchanged from the previous month.

Prices

• Refined sugar prices for beet and cane sugar remained stable in March, at 36 cents per pound and 37 cents per pound, respectively.
• Raw sugar prices have been falling, with the March settlement price at 24.73 cents per pound, down 9.3% from the November 2017 high.
• The spread between U.S. and world raw sugar prices has narrowed, but remains at the higher end of historical ranges.

Mexico Sugar Outlook

Production and Supply

• Mexico sugar production for 2017/18 is projected at 6.050 million metric tons (MT), raw value, with low-polarity sugar expected at 1.347 million MT.
• Total supply is projected at 7.222 million MT, and total use is expected at 6.233 million MT, resulting in an ending stocks projection of 989,000 MT, unchanged from the March forecast.
• The stocks-to-use ratio is projected at 15.9%, in line with historical levels.

Domestic Deliveries and HFCS

• Domestic sugar deliveries for human consumption are projected at 4.496 million MT, a 0.4% decline from the previous year.
• High fructose corn syrup (HFCS) deliveries are projected at 1.608 million MT, a 5.4% increase, driven by higher HFCS demand in the food and beverage sector.

Key Trends and Factors

U.S. Sugar Production

• Production reductions in both beet and cane sectors are due to lower sucrose recovery and weather-related delays.
• Weather conditions have been favorable, especially in the Red River Valley, supporting extraction rates and shrink rates.
• Planted acres for sugarbeets in 2018/19 are expected to decrease by 1.6%, with most regions seeing reductions, except the Great Lakes region.

U.S. Sugar Imports

• High-tier tariff imports have increased, partially offsetting the decline in domestic production.
• Imports under FTA are expected at 223,000 STRV, with the fiscal year projection including the first 9 months of the 2018 quota.

U.S. HFCS Market

• HFCS production in 2017 totaled 8.273 million STRV, a 1.1% decline from 2016, continuing a long-term downward trend.
• HFCS-42 and HFCS-55 are the two dominant types, with HFCS-55 primarily used in soft drinks and HFCS-42 in the food and baking industry.
• Production declines are attributed to labeling trends, higher corn prices, increased refined sugar imports, and industry consolidation.

Summary of Key Changes

• U.S. sugar production and imports have seen minor adjustments, with a focus on beet and cane sector reductions.
• Ending stocks for both the U.S. and Mexico have decreased, reflecting lower supply and increased use.
• HFCS deliveries in Mexico have increased, while domestic sugar deliveries remain below the previous year.
• Price trends show a decline in raw sugar prices and stabilization in refined sugar prices, with narrowing spreads between U.S. and global markets.

Figures and Tables

• Table 1 provides a detailed breakdown of U.S. sugar supply and use by fiscal year.
• Table 2 outlines beet sugar production calculations.
• Table 3 shows U.S. sugarbeet planted area projections.
• Table 4 provides Mexico's sugar supply and use data.
• Several figures illustrate production trends, extraction rates, and price movements over the years.