20170615-USDA-USDA_Sugar_and_Sweeteners_Outlook_2017.06.15_20页_1mb

Summary of Sugar and Sweeteners Outlook (June 2017)

Core Content

This report provides an overview of the sugar and sweeteners market outlook for the United States and Mexico for the 2016/17 and 2017/18 crop years. It outlines changes in production, imports, exports, and domestic use, along with the impact of the revised suspension agreements between the U.S. and Mexico.

Key Information

U.S. Sugar Supply and Use Projections

• 2016/17 Supply: Estimated at 14.016 million STRV, up by 59,000 STRV from the May estimate.

  • Beet Sugar Production: Increased to 4.988 million STRV (up 56,000 STRV from previous month).
  • Cane Sugar Production: Increased to 3.844 million STRV (up 3,000 STRV).
  • Total Domestic Deliveries: Estimated at 12.355 million STRV, unchanged from May.
    • Food and Beverage Deliveries: 12.200 million STRV, unchanged from May.
  • Ending Stocks: Estimated at 1.536 million STRV, up by 59,000 STRV from May.
    • Stocks-to-Use Ratio: Raised to 12.3% from 11.8%.

• 2017/18 Supply: Projected at 13.606 million STRV, a 430,000 STRV reduction from May.

  • Beet Sugar Production: Projected at 4.988 million STRV, up 38,000 STRV from May.
  • Cane Sugar Production: Remains at 3.750 million STRV.
  • Total Domestic Deliveries: Projected at 12.477 million STRV, unchanged from June.
    • Food and Beverage Deliveries: 12.322 million STRV, unchanged.
  • Ending Stocks: Projected at 1.104 million STRV, down 430,000 STRV from previous month.
    • Stocks-to-Use Ratio: Falls to 8.8%.

Mexico Sugar Supply and Use Projections

• 2016/17 Supply: Estimated at 7.097 million MT, down 201,000 MT from previous month.

  • Production: Decreased to 5.985 million MT, down 201,000 MT from May.
  • Total Imports: Estimated at 75,000 MT.
  • Total Exports: Projected at 1.145 million MT, up 40,000 MT from May.
    • Exports to U.S. and Puerto Rico: Remains at 995,000 MT.
    • Exports to Other Countries: Up to 159,000 MT.
  • Ending Stocks: Estimated at 1.101 million MT, down 192,000 MT from May.
    • Stocks-to-Use Ratio: Falls to 18.4% from 24.7%.

• 2017/18 Supply: Projected at 7.276 million MT, down 366,000 MT from May.

  • Production: Projected at 6.100 million MT, down 125,000 MT from previous month.
  • Total Exports: Projected at 1.544 million MT, down 451,000 MT from May.
    • Exports to U.S. and Puerto Rico: Projected at 1.519 million MT.
    • Exports to Other Countries: Remains at 25,000 MT.

Main Points

• U.S. Sugar Supply: The reduction in 2017/18 supply is primarily due to a significant drop in imports from Mexico, despite increases in beginning stocks and domestic production.
• Mexico Sugar Supply: Lower production and increased exports in 2016/17 led to a decrease in ending stocks. The 2017/18 production outlook is also reduced due to lower expected supplies.
• Suspension Agreements: A draft agreement was announced by the U.S. Department of Commerce (USDOC) and the Mexican government, revising the terms of the antidumping and countervailing duty suspension agreements.
  • Price Limits: Increased for refined and raw sugar.
  • Export Limit Calculation: Reduced the share of U.S. Needs for the July Export Limit to 50%.
  • Refined Sugar Allocation: Limited to 30% of the Export Limit with a polarity above 99.2%.
  • Shipping Patterns: Adjusted to allow for more flexibility in timing.
  • Additional U.S. Needs: Mexico will be offered the opportunity to supply before other countries.
• Domestic Deliveries: Strong performance through April, with beet sugar deliveries increasing 19.0% year-over-year and cane deliveries decreasing 5.9% compared to 2015/16.

Key Figures and Trends

• U.S. Beet Sugar Production: Expected to increase in the early part of the 2017/18 crop year, with 539,000 STRV (10.7%) produced before October 1.
• U.S. Cane Sugar Production: Stable with 138,000 STRV in Texas and unchanged levels in Florida and Louisiana.
• Mexico Production: Concluded its 2016/17 harvest with 5.985 million MT produced, lower than the previous forecast.
• Imports from Mexico: Reduced by 527,000 STRV for 2017/18 due to supply constraints, leading to a 451,000 MT decrease in U.S. imports.
• Ending Stocks: The lowest since 1990/91 in the U.S. for 2017/18, and 1.101 million MT in Mexico for 2016/17.

Impact of Revised Suspension Agreements

• The revised terms are expected to influence the specifications and timing of sugar shipments from Mexico to the U.S., but not the total market volumes.
• The changes include price limits, refined sugar allocation, and shipping pattern adjustments.
• The Export Limit remains unchanged, with the U.S. Needs calculation still based on historical data and previous forecasts.

Conclusion

The sugar market outlook for 2016/17 and 2017/18 shows a decline in U.S. sugar supply due to reduced Mexican imports, and a reduction in Mexican production leading to lower exports. The U.S. domestic deliveries remain strong, with beet sugar playing a major role in the growth. The revised suspension agreements are expected to affect the specifications and timing of sugar shipments, but not the overall volume. The stocks-to-use ratio is projected to fall to 8.8% in the U.S. for 2017/18, the lowest since 1990/91, while Mexico's stocks-to-use ratio is expected to decrease further.