20181017-USDA-Sugar_and_Sweeteners_Outlook_20页_1mb

Summary of Sugar and Sweeteners Outlook (SSS-M-362, October 17, 2018)

Core Content

This report provides an overview of the U.S. and Mexican sugar and sweeteners markets for the 2018/19 marketing year, based on the October 2018 World Agricultural Supply and Demand Estimates (WASDE). It outlines changes in production, supply, use, imports, exports, and pricing trends.

Main Points

U.S. Sugar Market Outlook

• Stocks-to-Use Ratio: The U.S. sugar market is projected to operate at a 12.7% stocks-to-use ratio for 2018/19, down from 16.2% in 2017/18.
• Production: Total U.S. sugar production for 2018/19 is estimated at 14.077 million STRV, a 100,000-STRV decrease from the September report.
  • Beet Sugar: Production is expected to be 5.236 million STRV, a 107,000-STRV decrease from September.
  • Cane Sugar: Production is projected at 4.026 million STRV, a 41,000-STRV increase, mainly due to higher production in Louisiana.
• Imports: Total imports for 2018/19 are forecast at 2.801 million STRV, a 25,000-STRV increase from the previous month.
  • Tariff-Rate Quota (TRQ): Imports under TRQ are reduced to 1.564 million STRV.
  • High-Duty Imports: Remain unchanged at 45,000 STRV.
• Exports: Exports for 2018/19 are projected at 850,000 STRV, a 25,000-STRV decrease from the previous month.
  • To the U.S. & Puerto Rico: Estimated at 721,000 STRV.
  • To Other Countries: Estimated at 274,000 STRV.
• Ending Stocks: Projected at 1.587 million STRV for 2018/19, down from 2.014 million STRV in 2017/18.
• Use: Total use is forecast at 12.490 million STRV, unchanged from the previous month.
  • Domestic Food & Beverage Use: Projected at 12.250 million STRV, up 1.2% from 2017/18.
• Pricing: Refined sugar prices are expected to remain firm, with a 12.7% stocks-to-use ratio for 2018/19. Wholesale refined beet sugar prices started at 33.0 cents per pound, down from 36.0 cents per pound in the previous year.

Mexico Sugar Market Outlook

• Production: Projected at 6.025 million MT for 2018/19, a 0.3% increase from 2017/18.
• Imports: Estimated at 115,000 MT for 2018/19, with 69,000 MT for consumption and 53,000 MT for exports under the IMMEX program.
• Exports: Total exports for 2018/19 are forecast at 995,000 MT, a 25,000-MT decrease from the previous month.
  • To the U.S. & Puerto Rico: Projected at 721,000 MT.
  • To Other Countries: Projected at 274,000 MT.
• Ending Stocks: Projected at 1.435 million MT for 2018/19, up 26,000 MT from the September forecast.
• Stocks-to-Use Ratio: Forecast at 24.6% for 2018/19, indicating a relatively large inventory.
• FIMAE Program: Allows Mexican processors to convert supplies into export credits, which will be used for early exports in 2018/19.

Key Information

• Domestic Production Trends:
  • Sugarbeet production decreased due to lower yields, particularly in Minnesota.
  • Sugarcane production increased in Louisiana, partially offsetting the decline in beet sugar.
• Import Adjustments:
  • Reduced imports from Mexico due to lower U.S. demand.
  • Increased imports under FTAs due to delayed shipments from 2017/18.
• Export Adjustments:
  • Export volumes to the U.S. and Puerto Rico are expected to decrease.
  • Export volumes to other countries are adjusted due to the FIMAE program.
• Inventory Levels:
  • U.S. ending stocks are projected to decrease, reflecting tighter supply conditions.
  • Mexico is expected to maintain higher ending stocks due to carryover and FIMAE program.
• Market Dynamics:
  • Refined sugar prices are expected to remain firm, but raw sugar prices have fallen due to increased supply.
  • Refining margins are expected to remain stable based on recent contract prices.

Conclusion

The U.S. sugar market is expected to see a tighter supply situation in 2018/19 due to reduced production and beginning stocks, partially offset by increased imports. Mexico's sugar market is anticipated to have larger carryover into the new marketing year, supported by the FIMAE program, leading to higher ending stocks and a more balanced supply-to-use ratio. Overall, market pricing is influenced by inventory levels and production trends, with refined sugar prices remaining firm and raw sugar prices declining.