SUGAR AND SWEETENER YEARBOOK January 13, 1998 December 1997, SSS-222 Approved by the World Agricultural Outlook Board ---------------------------------------------------------------------------- SUGAR AND SWEETENER YEARBOOK is published annually by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20036-5831. This release contains only the text of the report -- tables and graphics are not included. Printed copies of this report are available from the ERS-NASS order desk. Call, toll-free, 1-800-999-6779 and ask for stock # SSS-222, $22. ERS-NASS accepts MasterCard and Visa. ---------------------------------------------------------------------------- Summary released December 18, 1997. The next Sugar and Sweetener Situation and Outlook report summary is scheduled for release on May 19, 1998. Subscriptions to the published report are available from the ERS-NASS order desk. Call, toll-free, 1-800-999-6779 and ask for stock #SSS, $22/year. ERS-NASS accepts MasterCard and Visa. Contents Summary Special Articles Sweetener Flows in the North American Region Cuba's Sugar Industry: An Update Autofax Access to Sugar-Related Data Internet Access to Sugar-Related Data List of Tables Report Coordinator Jacqueline Salsgiver (202) 694-5263 FAX (202) 694-5884 E-mail: JSALSGIV@ECON.AG.GOV Principal Contributors Ron Lord Nydia Suarez Database Coordinator/Graphics & Table Design Fannye Lockley-Jolly Layout & Text Design Wynnice Napper Summary U.S. sugar production in 1997/98 (October 1997-September 1998) is projected at 7.86 million short tons, raw value, up 9 percent from 7.2 million tons in 1996/97. If realized, this would be only 1 percent below the record U.S. sugar production of 1994/95. Beet sugar production is forecast at 4.4 million tons, raw value, representing 56 percent of total expected sugar production and up 10 percent from last year. The beet sugar production forecast is 100,000 tons above the September forecast based on better-than-expected beet production and higher sugar content. Beet acreage harvested is 1.43 million acres, 107,000 acres above last year, and on par with 1992/93 through 1995/96. Beet acreage was up in all major growing states. The increase in acreage was due in part to higher sugarbeet prices and lower prices of competing crops. The season average price for sugarbeets in 1996/97 was $43.90 per ton, up $5.80 per ton (15 percent) from the year before. Cane sugar production is forecast at 3.46 million tons, raw value, up 265,000 tons from last year. Louisiana is forecast to produce 1.25 million tons, which would be up 200,000 tons from last year. Louisiana's forecast of acreage harvested is a record 375,000 acres, up 12 percent, and sugarcane yield is forecast at 29 tons per acre, 4 percent above last year, the previous record. The implied yield of 3.3 tons of sugar per acre would exceed last year's record by 6 percent. A new variety is contributing to higher per-acre cane yields. The crop was about 68 percent harvested by the end of November. Weather had been excellent in October and early November, but rains in late November hampered the harvest and increased trash and mud entering the mills. Most mills will finish by the end of the year, with a few likely to operate into early January. Florida's sugar production is forecast at 1.75 million tons, up 71,000 tons from last year. The forecast sugarcane yield is 34 tons per acre, from 419,000 acres harvested for sugar, resulting in 14.2 million tons of cane, up 3.2 percent from last year. The implied recovery rate, 12.28 percent, would be 10 percent above last year and the 5-year average. Florida's season runs from October through March or early April, with January-March production averaging 57 percent of the total. U.S. sugar consumption, measured by deliveries, for 1997/98 is forecast at 9.95 million tons, up 1.85 percent or 181,000 tons from the revised estimate for 1996/97. Consumption has been increasing 160,000 tons, or about 1.9 percent per year since 1985/86. Among industrial users, 1996/97 sugar use by the baking, cereal, and allied products category grew 9 percent, to 2.1 million tons, while sugar used in beverages fell 12 percent, to 169,000 tons. The raw cane sugar tariff-rate quota (TRQ) for 1997/98 was set at 1.8 million metric tons, raw value, with an initial allocation of 1.2 million. The refined sugar TRQ was set at 50,000 tons, raw value, with 25,000 allocated to Mexico under North America Free Trade Agreement (NAFTA) provisions. In short tons, imports under the TRQ are forecast at 1.96 million, including a forecast shortfall of 50,000. Other forecast imports include 300,000 tons for re-export programs; 10,000 for polyhydric alcohol; 50,000 under tariff code 1702.90.40.00; and 5,000 of high-tariff sugar. U.S. sugar stocks at the end of 1997/98 (September 30, 1998) are forecast at 1.52 million short tons, up slightly from 1996/97. Stocks reflect a projected total supply of 11.67 million tons and total use of 10.15 million. U.S. raw sugar prices (New York No.14 contract) averaged 21.90 cents per pound in November, compared with 22.12 cents in November 1996, and 22.27 cents in October 1997. Refined beet sugar list prices in October-December averaged about 25 cents per pound, compared with 29.00 cents a year ago. High fructose corn syrup (HFCS) production in 1997 is forecast at 8.6 million short tons, dry basis, up 5.3 percent from 1996. The HFCS-42 spot price has been about 10.5 cents per pound, dry basis, for most of 1997, down about 28 percent from 14.5 cents in 1996. The HFCS industry expanded capacity significantly between 1995 and 1997, putting downward pressure on prices. U.S. HFCS consumption has grown at 4 to 5 percent a year, below the rate of capacity growth. U.S. exports of HFCS to Mexico continue to grow despite increased tariffs in 1996 and the imposition of provisional anti-dumping duties earlier this year. Sweetener Flows in The North American Region by Nydia R. Suarez 1/ --------------- 1/ Agricultural economist, Specialty Crops Branch, Economic Research Service, USDA. --------------- Abstract: Sugar trade volumes between the United States, Canada, and Mexico are important to the respective countries, though not very large compared with each country's production and consumption, except for Canada. Mexico has shifted from being a deficit to a surplus sugar producer in recent years. Changing trade rules and patterns have caused trade frictions. The United States and Canada recently settled a dispute over market access issues, while a Mexican Government announcement on an anti-dumping case against U.S. HFCS exporting companies is expected by the end of 1997. Keywords: Canada, Mexico, the United States, the North American Free Trade Agreement, high fructose corn syrup, trade, sugar, imports, exports. Introduction Trade in sugar between the United States, Canada, and Mexico is strongly influenced by the three countries' respective sugar policies. Canada's sugar tariffs are relatively low, and Canada does not have a sugar price support program. Between the United States and Mexico, trade in sugar has in the past occurred in both directions. The United States and Mexico support sugar prices in part by restricting imports while Mexico also subsidizes exports. High fructose corn syrup (HFCS) trade between the three countries varies. Trade is negligible between Mexico and Canada, while the United States exports to Mexico. HFCS tariffs between the three countries are relatively low. The recent increase in U.S. HFCS exports to Mexico has raised concerns in the Mexican sugar industry. There is two-way trade in HFCS between the United States and Canada, and U.S. HFCS exports to Canada have been steady except for years of higher Canadian sugar prices, such as in 1991. Canada at one time exported the majority of its HFCS production to the United States, but less has been exported in recent years due in part to low HFCS prices in the United States. Mexico-U.S. Sweetener Trade When the United States implemented a sugar quota program in 1982, Mexico was allocated a "minimum boatload" share of the U.S. sugar import quota (and from 1990, under the tariff-rate quota), which amounted to 7,000-10,000 tons in most years. From 1982 to 1994, most of Mexico's sugar exports to the United States were under both the U.S. sugar quota/tariff-rate quota (TRQ) and imported by U.S. refiners for re-export. The North American Free Trade Agreement (NAFTA), which became effective in January 1994, contains provisions affecting sugar trade between the United States and Mexico. For purposes relating to access to the other country's sugar market, a formula in the NAFTA defines Mexico (or the United States) as being a net surplus producer when projected sugar production minus projected domestic consumption is positive. According to a side letter to the original NAFTA document, HFCS is included in the net surplus producer formula, but on the consumption side only. As a result, Mexico would have to produce sugar in excess of its consumption of both sugar and HFCS in order to attain net surplus producer status. Until September 30, 2000, Mexican low-duty sugar access to the United States is limited to the amount of Mexico's net surplus of sugar, as defined by the net surplus production formula, up to a limit of 25,000 metric tons, raw value. From October 1, 2000 until September 30, 2008, the low-duty access limit is the net surplus of sugar, but not more than 250,000 tons. After October 1, 2008, the high tariff on sugar between the two countries will have declined to zero, and there will be free trade in sugar. Mexico was classified as a net surplus sugar producer and given a NAFTA allocation of 25,000 tons for 1996/97 and also for 1997/98. The sugar can be shipped as either raw or refined. Although Mexico was a net sugar importer in the early 1990s, beginning in 1994/95, Mexico again began to export significant amounts. Exports are currently forecast to reach 750,000 tons in 1997/98, compared with imports of 80,000 tons. Factors contributing to the surplus sugar include higher production in the wake of government deregulation and privatization in the early 1990s, lower consumption due in part to the economic decline which followed the peso devaluation of December 1994, and rising HFCS consumption in the last few years. These factors were reinforced by increased sugar prices in Mexico, in particular as measured in pesos, providing higher returns for producers and dampening sugar consumption. The price of sugar in Mexico is now sufficiently high so that HFCS is an attractive substitute for many sweetener users. In the United States, almost all manufacturers who can utilize a liquid sugar have switched to HFCS. A similar loss of sugar's market share to HFCS could occur in Mexico, particularly if the price of sugar remains relatively high. Two Mexican companies, both affiliated with U.S. companies, have recently built facilities to manufacture HFCS in Mexico and now produce an estimated 250,000 tons 2/ --------- 2/ For HFCS, units are commercial weight (not dry basis). --------- a year, up from almost zero 2 years ago. U.S. exports of HFCS to Mexico were 90,000 tons in 1994, fell to 60,000 when Mexico was in recession in 1995, then rose to 184,000 in 1996. With HFCS use rising rapidly, on February 26, 1997, the Mexican Government initiated an anti-dumping investigation regarding imports of HFCS from the United States at the request of its National Sugar Industry Chamber, the association of Mexico's sugar producers. On June 24, Mexico issued a preliminary ruling and imposed provisional duties on U.S.-based companies exporting HFCS to Mexico. These duties, as high as $175 per ton, were imposed while investigation of 17 major firms for disloyal trade practices and dumping of HFCS at below production costs continued. According to the Mexico Trade Ministry, the duties are equivalent to an average dumping margin of 102.2 percent for grade-42 syrup and 61.1 percent for grade-55 fructose. The United States requested World Trade Organization (WTO) consultations on the issue in September, and the Mexican Government is expected to announce a final decision in early 1998. Meanwhile, even with the anti-dumping duties in place since June, U.S. exports of HFCS to Mexico in 1997 have continued strong, with January-October exports totaling 161,000 tons, compared with 135,000 for the same period in 1996. There have been trade reports of an agreement between Mexican sugar mills and soft drink bottlers to limit their use of HFCS for the next 3 years. Canada-U.S. Sweetener Trade The United States exported over 50,000 tons of sugar annually to Canada from the mid-1980s to 1992, mostly under the U.S. refined sugar re-export program, and over 100,000 tons from 1993 to 1995. Then in November 1995, Canada imposed anti-dumping duties on U.S. sugar companies, ranging from 69 to 85 percent. Subsequently, U.S. sugar exports to Canada fell, from over 100,000 tons in 1995 to about 20,000 in 1996, and only 4,000 tons from January through October 1997. The decline in imports of refined sugar from the United States has enabled Canadian sugar refiners to increase imports of raw sugar and capture a larger share of the domestic market for refined sugar: in 1996, Canadian raw sugar imports exceeded 1 million tons, 20 percent greater than the previous year. Canada has maintained generally low tariffs on both raw and refined sugar imports, but tariffs on refined sugar are higher than raw sugar, a policy which favors Canada's cane sugar refining industry. Refined sugar imports from countries with most-favored-nation (MFN) status pay a duty of CAN$30.86 per ton and CAN$22.05 to CAN$25.57 per ton on raw sugar, depending on the polarization of the sugar. Though Canada is a net sugar importer, Canadian sugar producers have at times exported sugar to the United States where the price is higher. To be considered Canadian in origin, the sugar must be produced from Canadian-grown sugarbeets, since raw cane sugar from another country, even if refined in Canada, is not considered to be of Canadian origin. From 1989 through 1995, Canada exported between 25,000 and 60,000 tons of refined beet sugar, raw value, to the United States annually. The tariff charged on this beet sugar was the low tariff established under the 1989 U.S.-Canada Free Trade Agreement, in 1995 US0.20 cents a pound. Beginning in 1995, the year in which the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) was implemented, low-duty Canadian sugar could enter the United States only as part of the U.S. TRQ for refined sugar, which for 1995/96 and 1996/97 was 22,000 tons, raw value. Refined sugar above the TRQ level, whether from Canada or elsewhere, was charged the high duty (in 1997, 17.65 cents a pound). The U.S. refined sugar TRQ in 1995/96 and 1996/97 was not allocated, but was on a first-come, first-served basis: Canadian sugar exporters competed for a share of the total with other potential suppliers of refined sugar, and the refined TRQ was generally filled the day it opened, October 1 in fiscal 1997 and fiscal 1998. In September 1997, the United States and Canada finalized the terms of a settlement under which overall Canadian access to U.S. sugar TRQs remain unchanged. Beginning with the 1997/98 TRQ period, the United States will allocate to Canada 10,300 metric tons, raw value, for sugar that is a product of Canada, which is an amount based on the historic trade. Canada will also be permitted to compete for any quantity of the refined sugar TRQ that is not allocated among supplying countries and is not reserved for specialty sugar, without regard to whether the share allocated to Canada for that period has been filled. An agreement was also reached on a trade dispute concerning sugar-containing products. Canada had claimed that certain sugar-containing products being shipped from the United States to Canada under the U.S. sugar-containing products re-export program were in violation of NAFTA. Canada also noted that after 1995, when the United States reclassified some products into a TRQ for sugar-containing products, exports of these products from Canada to the United States had declined. Beginning with the 1997/98 sugar-containing product TRQ, the United States will allocate 59,250 metric tons to Canada based on historic trade. The total annual sugar-containing product TRQ is 64,709 metric tons. Canada has dropped its current NAFTA challenge to the U.S. sugar-containing product re-export program. An interesting trade pattern in Canadian sugarbeets has also developed whereby sugarbeets planted in Ontario are processed in the United States, and this sugar becomes part of the U.S. supply. For the 1997/98 season, about 3,000 acres of Ontario sugarbeets were delivered to a factory in Michigan. The U.S. duty on Canadian sugarbeets was US17.6 cents per metric ton in 1996, 8.8 cents in 1997, and will be zero beginning in 1998. Conclusion The level of sugar trade between Mexico and the United States will reflect the limits established in the NAFTA access schedule, which rises to a maximum of 250,000 tons after the year 2000. While U.S. exports of HFCS to Mexico are likely to continue to increase, the rate of the increase will depend on future government decisions. Sugar, HFCS, and sugar-containing product trade between the United States and Canada is important to the sweetener industries of both countries. Friction between the United States and Canada over trade in sugar and sugar-containing products was greatly reduced by a settlement in September 1997. Cuba's Sugar Industry: An Update by Ron Lord 1/ ---------- 1/ The author is an agricultural economist in the Specialty Crops Branch, Economic Research Service, USDA. ---------- Abstract: Cuban sugar production in 1997/98 is projected to fall to 3.9 million metric tons, raw value, below the 1996/97 level of 4.2 million tons. The Cuban Government has announced that it will focus on rebuilding the long-run health of the industry instead of attempting to maximize short-run output as was done in recent years. Cuba's share of world exports is forecast to fall below 10 percent in 1997/98. Keywords: Sugar, sugar trade, Cuba, sugarcane, Helms-Burton Act. Introduction For many decades prior to the U.S. embargo of Cuba in 1960, the sugar economies of the United States and Cuba were tightly integrated, and Cuba often sent over half of its total exports to the United States, which in turn relied on Cuba for more than one-third of its foreign supplies. 2/ ------------ 2/ See previous article on Cuba in the March 1992 Sugar and Sweetener Situation and Outlook report for more details. ------------ After the U.S. embargo of Cuba, the USSR and various countries in Central and Eastern Europe provided a market for much of Cuba's sugar. Cuban sugar production was generally in the 4- to 8-million ton 3/ ---------- 3/ In this article, all tons are metric tons, equal to 2,204.62 pounds. ---------- range through the 1960s, 1970s, and 1980s. Importation of large volumes of Cuban sugar by the USSR and its former satellites was in part driven by political decisions to support Cuba, and the price paid to Cuba was often well above prevailing world sugar prices, often consummated with barter agreements for equipment and oil. Since 1990, Cuba has earned a much lower return for its sugar, receiving either the prevailing world market price or its approximate equivalent under barter agreements. This decline in revenues, combined with other disruptions brought on by the decline in trading relationships with the former East Block countries, resulted in a sharp drop in Cuban sugar production, from 8 million tons in 1989/90 to 3.3 million tons in 1994/95. Since then, there has been some recovery, and production is estimated to have been 4.2 million tons in 1996/97, after 4.45 million tons the previous season. There are 156 operable cane sugar mills in Cuba. Many have equipment that dates back to the early part of this century, and only eight mills have been built since 1959. The harvesting process was largely mechanized in the 1970s, and today about 80 percent of the harvest is done by machines. The sugar industry employs one-tenth of the workforce, or about 400,000 people. In September 1993, the government set up a new form of farm-level cooperative, the Unidades Basicas de Produccion Coopertiva ( Basic Unit of Cooperative Production, or UBPC). By the end of 1993, more than 98 percent of sugarcane agricultural workers became members of UBPCs (Castellanos and Alvarez, p. 65). While the UBPCs were in part designed to tie worker payments to productivity, improvements in productivity have not yet occurred, and in 1997 most UBPCs are still not profitable (CubaNews, p. 7). Sugarcane is typically harvested from November/December to April/May. If the harvest continues past April or May, it is often disrupted by heavy rains. Sugar and the Cuban Economy Sugar is Cuba's largest export product. From 1990 through 1992, sugar accounted for 75 percent of Cuba's total exports. However, as sugar exports fell in the early 1990s, tourism replaced sugar as the largest source of foreign exchange. Tourism has grown at 20 percent a year since 1990, and in 1996 earned about $1.45 4/ ---------- 4/ All revenues are expressed in U.S. dollars. ---------- billion in foreign exchange, compared with about $900 million from sugar. Another source of revenue for Cuba is remittances from Cubans abroad, estimated at $530 million in 1995 and $627 million in 1996 (UPI). Foreign investment in the sugar industry, once considered political anathema, was permitted after the disastrous 1994/95 crop. In September 1995, the Cuban National Assembly approved Law No. 77, which governs foreign investment in the economy. Foreign investment in the sugar sector is mostly for the short-run finance of sugar production at the provincial level (CubaNews, p. 6). In 1995/96, nine of the 13 sugarcane-producing provinces borrowed about $130 million from foreign investors for agricultural activities, and $160 million for transportation and processing activities. This foreign investment in sugar comes with high interest rates, due to high risks, and oftentimes requires repayment with sugar. The Cuban Government claims to have already paid back the loans for the 1995/96 crop. Foreign loans for the 1996/97 crop amounted to $330 million. Foreign investment is also being sought for joint ventures in sugar-related industries. One joint venture with a company from Spain has been established to produce high-quality alcohol. The installation is estimated to require $6.5 million and produce 150,000 hectoliters of alcohol a year for export. Currently, Cuba has 16 alcohol plants producing 1.6 million hectoliters a year. For 1997, Cuba's Gross Domestic Product (GDP) growth is expected at 2.5 percent, down from 1996's 7.8 percent in part due to the disappointing 1996/97 sugar harvest and lower sugar exports. Much of the growth in 1996 was attributable to the rise in sugar exports from the previous year's extremely low levels. Following economic reforms in 1993, which included the legalization of the use of hard currency (U.S. dollars), Cuba's GDP grew at 0.7 percent in 1994, 2.5 percent in 1995, and 7.8 percent in 1996. The economy had contracted 35 percent between 1990 and 1993. The U.S. "Helms-Burton" Law "The Cuban Liberty and Democratic Solidarity Act of 1996," commonly known as the Helms-Burton law, was approved by the U.S. Congress in March 1996 with the general intent of tightening the U.S. economic embargo of Cuba. Title III of the act decrees that companies in a third country trading with Cuba can be liable to pay damages to former owners of confiscated Cuban property or their successors. For example, if a third-country company traded or bought sugar produced at a Cuban sugar mill which had been confiscated, the company would likely be found to be "trafficking" in the confiscated property. A moratorium is in place on Title III to allow for negotiations with other countries which have protested the act. Title IV, which is in effect, bars officials from companies found to be engaged in "trafficking" from entering the United States. In the wake of Helms-Burton, some banking and investment groups have withdrawn from participation in loans for the sugar harvest, but many other companies continue to provide loans. One large sugar trade house halted trading in Cuban sugar due to possible implications of the act. And despite the European Union's (EU) large exportable sugar surplus, it continues to import some Cuban sugar. For many years, Cuban sugar has not been tendered against the most widely used world sugar futures contract, the No. 11 contract of the New York Coffee Sugar & Cocoa Exchange, so the act had little direct impact on that market. But the value of Cuban sugar has probably decreased due to the act. For example, competition is reduced by limiting the number of nearby destinations willing to accept Cuban sugar, thereby lowering the net price received. The act has also increased the degree of secrecy surrounding many dealings with Cuba. Carlos Lage, the Cuban Vice President in charge of economic affairs, indicated that the Helms-Burton law had seriously interrupted the foreign financing needed to begin the 1996/97 harvest and that the harvest started later, with fewer foreign inputs than planned. Cuban Sugar Trade, Past and Present Once the world's largest sugar exporter, Cuba now ranks behind Brazil, the European Union, Australia, and Thailand. The Cuban share of world exports has fallen from above 20 percent in 1990/91 to around 10 percent in recent years (table 1). During the 1980s, the USSR (primarily Russia) took over half of Cuba's total sugar exports, averaging 3-4 million tons a year, and Cuba continued to send large amounts of sugar to Russia under a barter arrangement for Russian oil in the early 1990s. But in 1996, Russia imported 1.8 million tons of Cuban sugar, up from only 722,000 tons in 1995 (table 2). The Russian Government traditionally handled most of this trade directly, but private traders are now handling more of the business, and the Russian market is increasingly competitive. Russia will import slightly more than 3 million tons this year, much of it in the form of white sugar from Ukraine. In May 1997, the Russian Ministry of Foreign Economic Relations submitted proposals to hold a tender on an oil-for-sugar contract with Cuba. The Ministry's proposal was for 4.5 million tons of oil to be traded for 1.5 million tons of sugar in 1997, and 5.1 million tons of oil for 1.7 million tons of sugar in 1998. It is not known if this barter trade will actually occur. Russia also imports sugar from Ukraine, Brazil, and other countries. The countries of the former USSR are still the primary destination of Cuban exports, accounting for 55 percent of the total in 1996 (table 2). There has been a falling off of Cuban exports to the countries of Eastern Europe, which accounted for 15 percent of total exports in 1985-89, but only 8 percent in 1996. In this group, only Bulgaria and Romania continue to import Cuban sugar. Even these two countries hope to increase their domestic beet sugar production and are not likely to provide a growth market for Cuban sugar in the future. In Asia, Cuba's largest customers have traditionally been China and Japan. While freight costs are high, there is (or has been) political support in China to buy Cuban sugar in some years. Japan has been a steady importer of over 100,000 tons a year, probably as a strategy to diversify origins. In the Middle East and Africa, Cuba's main customers have been Algeria, Egypt, and Morocco. This region's share of Cuba's total exports grew from 7 percent in 1985-89 to 25 percent in 1994, but has fallen back to 18 percent in 1995 and 17 percent in 1996. Within the last year, two new sugar refineries have opened in the Middle East, and the region's imports of raw sugar will rise as the refineries begin to operate closer to capacity, possibly providing a market for Cuban raw sugar. In the Western Hemisphere, which was once Cuba's best market, most countries are sugar exporters and the region's largest importer, the United States, maintains an economic embargo. However, Canada has been a steady importer of Cuban sugar, taking an average of 140,000 tons a year during 1985-89, and almost 500,000 tons in 1992. Since then, Canadian imports have dropped to 140,000 tons in 1996 and appear to be steady at that pace so far in 1997. Brazil at one time imported some Cuban sugar for refining and re-exporting, but stopped after 1993 and is not likely to resume. Current Sugar Production Situation The U. S. Department of Agriculture's (USDA) current estimate of Cuba's 1996/97 production is 4.2 million tons, but a Cuban official recently stated that production was 4.25 million tons (Reuters, December 13). There were many problems with the harvest, including rain, lack of spare parts, and mill breakdowns, but the key constraint was lack of sufficient cane entering the mills. Breaking with a longstanding tradition of keeping all the mills running, only 140 of the 156 mills operated, with many mills short of cane. Earlier, Cuban Government forecasts had projected 1996/97 sugar production at 5 million tons, and the disappointing crop provoked a major review of the industry. Some of the blame was placed on Hurricane Lili, which battered Cuba in October 1996, and on the late arrival of supplies such as fertilizer due to difficulties in obtaining foreign financing. In the wake of the poor crop, a major government review of the industry occurred, and recent government announcements have placed emphasis on lowering costs rather than maximizing output. In the past, when the government wanted to maximize sugar output during a harvest, it was sometimes the practice to stretch the harvest into June, and harvest some cane which would not ordinarily be ready for harvest until the next crop year. When this was done, the following year's harvest usually suffered. But in 1996/97, Cuba apparently did not cut immature cane. In 1997, Cuba planted over 1 million acres, up from 650,000 acres in each of the past 2 years. However, a drought from January through May delayed much of the planting until May and June, and this late-planted cane will not be harvested until 1998/99. Cuba has announced plans to continue an aggressive planting program through the year 2000 in an attempt to increase output. The 1997/98 harvest began in November. The Cuban Government announced plans to have most mills grinding earlier than normal this year in an attempt to avoid harvesting in May and June of 1998, as the current El Nino phenomenon could contribute to disruptive rains during April, May, and June of 1998. During the El Nino of 1982/83, heavy spring rains disrupted the harvest; mechanical harvesters cannot move through wet fields, a serious problem since over 80 percent of the harvest is now mechanized. In an attempt to lower costs, up to 40 mills may not run in 1997/98, affecting about 20,000 workers. Such a displacement of the labor force will present a management challenge to the government. Consideration is even being given to permanently close some mills. For the 1997/98 harvest, USDA forecasts production at 3.9 million tons, down 7 percent from last year's 4.2 million tons. Cuban Government sources have indicated that 1997/98 production is not likely to exceed 1996/97, and recently indicated that production would likely be less than 4 million tons (Reuters, December 13). Whither the Cuban Sugar Industry? At the recent Communist Party Fifth Congress in Havana in October, President Castro pledged that Cuba would never abandon socialism. Many foreign investors, apparently undeterred by this rhetoric, are investing in those parts of the Cuban economy which have been opened by some measure of economic reform. Sugar plays a unique role in Cuban politics and economics, and President Castro continues to express the view that the government must continue its control over the sugar industry. In October 1997, the Cuban Sugar Minister, Nelson Torres, was replaced by army general Ulises Rosales del Toro, previously first deputy Defense Minister. Cuba's sugar production industry has been in decline since 1992. Though it has a climate well-suited for sugarcane cultivation, it has not kept up with technological advances in place in many other countries and is hampered by the lack of foreign exchange. Given the right economic climate, increased investments in Cuba's sugar industry might be forthcoming. The most critical question facing the Cuban sugar industry is not technology, however, but the role of the government, and a return to higher sugar production levels will probably require improved incentives for both workers and potential investors. List of Tables World and U.S. Sugar and Corn Sweetener Prices 1. World refined sugar price, monthly, quarterly, and by calendar and fiscal year 2. World raw sugar price, monthly, quarterly, and by calendar and fiscal year 3. U.S. raw sugar price, duty fee paid, New York, monthly, quarterly, and by calendar and fiscal year 4. U.S. wholesale refined beet sugar price, Midwest markets, monthly, quarterly, and by calendar and fiscal year 5. U.S. retail refined sugar price, monthly, quarterly, and by calendar and fiscal year 6. U.S. spot price for HFCS-42, Midwest markets, monthly, quarterly, and by calendar and fiscal year 7. U.S. wholesale list price for glucose syrup, Midwest markets, monthly, quarterly, and by calendar and fiscal year 8. U.S. wholesale list price for dextrose, Midwest markets, monthly, quarterly, and by calendar and fiscal year 9. U.S. Producer Price Index for HFCS and sugar, monthly 10. U.S. Consumer Price Index for sugar and selected sweetener-containing products U.S. Sugar Supply and Use 11. U.S. sugarbeet crops: Area planted, acres harvested, yield per acre, and production, by State and region 12. U.S. sugarcane: Area, yield, production, output, recovery rate, and sugar yield per acre, crop years 13. U.S. beet and cane sugar production by State, quarterly, fiscal, and calendar year 14. U.S. production of beet sugar and cane sugar by State, monthly, quarterly, fiscal, calendar, and crop year 15. U.S. beet and cane sugar production (including Puerto Rico), fiscal year, and share of total 16. U.S. beet and cane sugar deliveries for human consumption (excluding importers' direct consumption), quarterly, fiscal, and calendar year 17. U.S. cane and beet sugar deliveries, monthly, quarterly, and by fiscal and calendar year 18. U.S. sugar deliveries for human consumption by type of user, quarterly and calendar year 19. U.S. sugar imports under tariff-rate quota (TRQ), by country 20. U.S. sugar stocks held by primary distributors, by quarters 21. U.S. sugar (including Puerto Rico) supply and use, calendar year 22. U.S. sugar (including Puerto Rico) supply and use, fiscal year Corn Sweetener Supply, Use, and Trade 23. U.S. wet-milled use of field corn, crop year 24. U.S. high fructose corn syrup (HFCS) production, quarterly, fiscal, and calendar year 25. U.S. high fructose corn syrup (HFCS) deliveries, quarterly, fiscal, and calendar year 26. U.S. imports of corn sweeteners, selected sweeteners, and molasses 27. U.S. high fructose corn syrup (HFCS) supply and use, calendar year 28. Net cost of corn starch to U.S. wet-millers, Midwest markets U.S. Consumption of Caloric Sweeteners 29. U.S. (including Puerto Rico) total consumption of caloric sweeteners, calendar year 30. U.S. (including Puerto Rico) per capita consumption of caloric sweeteners, calendar year U.S. Molasses Production, Imports, and Price 31. U.S. molasses production from sugarcane and sugarbeet processing 32. U.S. imports of molasses for industrial or feed use 33. U.S. molasses prices U.S. Honey Production, Use, Prices, and Trade 34. U.S. honey production, imports, and exports, crop year High Intensity Sweetener Production, Trade, and Prices 35. U.S. imports of aspartame by country of origin 36. U.S. prices for selected high intensity sweeteners Special Article Tables A1. Sugar production, supply, and distribution A2. U.S. corn sweetener exports to Mexico and Canada, calendar years A3. U.S. corn sweetener imports from Mexico and Canada, calendar years A4. U.S. HFCS trade with Mexico and Canada, monthly 1989-97 A5. Canada: Imports of sugar by country of origin, 1989-1996 A6. Canada: Exports of sugar by country of destination, 1989-1996 A7. Mexico: Imports of sugar by country of origin, 1989-1996 A8. Mexico: Exports of sugar by country of destination, 1989-1996 A9. U.S.: Imports of sugar by country of origin, 1989-1996 A10. U.S.: Exports of sugar by country of destination, 1989-96 B1. Major sugar exporters and Cuba's share of world exports B2. Cuba's sugar exports by country and region, 1985-96 B3. Cuba's sugar exports to major trading partners, 1960-96 B4. Cuba: Sugarcane area, yield, and production B5. Cuba's sugar production, supply, and distribution References: Castellanos, Lazaro Pena and Jose Alvarez. "The Transformation of the State Extensive Growth Model in Cuba's Sugarcane Agriculture." Agriculture and Human Values: The Journal of the Agriculture, Food, and Human Values Society. Vol. 13, No. 1, Winter 1996. Bridge News Wire Stories. CubaNews, Vol. 5, No. 9. The Miami Herald Publishing Co., September 1997. Godinez, Felix B. "Cuba-Russia Sugar Trade Relations: Disputes and the Market Struggle." Association of the Study of the Cuban Economy Newsletter, November 1997. Reuters Wire Story, December 13, 1997. United Press International, Saturday, October 4, 1997, Press Release. ERS Autofax Access to Sugar-Related Data (ERS) From your fax machine, call (202) 694-5700 and respond to the voice prompts to have these documents automatically downloaded to your fax machine. You may request up to three documents in one phone call. Directory Identification Numbers and Titles: 12600- Updated list of all sugar and sweetener documents available on the ERS AutoFax 12626- World Agricultural Supply and Demand Estimates for Sugar 12627- Monthly U.S. Sugar Prices: Wholesale refined beet sugar price, Midwest market, 1960-present; U.S. raw sugar price, duty-fee paid New York, 1960-present; U.S. retail refined sugar price, 1975-present. 12628- Monthly HFCS Prices: Wholesale list price for HFCS-42, Midwest market, 1975-present; Wholesale spot price for HFCS-42, Midwest market, 1995-present; Wholesale list price for HFCS-55, Midwest market, 1981-present; Wholesale list price for glucose corn syrup, Midwest market, 1975-present; Wholesale list price for dextrose, Midwest market, 1975-present; U.S. Producer Price Index for HFCS and sugar, 1985-present. 12629- Monthly World Sugar Prices: World raw sugar price, 1960-present; world refined sugar price, 1980-present. 12630- U.S. and world sugar prices, starting 1990-present, monthly. 12632- U.S. Sugar (including Puerto Rico) supply and use, fiscal years, 1980/81-present. 12633- The Beet Sugar Industry of Minnesota and North Dakota: Current Situation and Prospects, by Ron Lord, September 1994 Sugar and Sweetener Situation and Outlook report. 12634- Text boxes, graphs, and tables, September 1997 Sugar and Sweetener S&O report, "HFCS Trade Dispute with Mexico," by Jacqueline Salsgiver; "Origin of the U.S. Sugar Import Tariff-Rate Quota Shares," by Nydia Suarez; and "Changing Structure of the U.S. Refined Sugar Market," by Ron Lord and Robert Barry. Foreign Agricultural Service (FAS) From your fax machine, dial (202) 720-0876 and listen to the voice prompt. The following documents are available by using the 2-digits codes: Code Document Name 01 List of available documents 05 Fact Sheet--The U.S. Sugar Program 06 USDA FY 1998 Federal Register Notice 07 USDA Press Release: FY 1998 tariff-rate quota 08 USTR Press Release: FY 1998 Raw Sugar Allocations 09 USTR Press Release: January allocations (if any) 10 USTR Press Release: March allocations (if any) 11 USTR Press Release: May allocations (if any) 12 1998 Sugar Imports Tracking Worksheet 13 U.S. Sugar Supply and Demand (WASDE), updated monthly 14 Fact Sheet -- The Sugar-Containing Products Re-export Program 15 Regulations -- Sugar to be Re-exported in Sugar-Containing Products 16 Regulations -- Sugar to be Re-exported in Refined Form 17 Regulations -- Sugar for the Production of Polyhydric Alcohol 18 Application for Specialty Sugar Certificate Internet Access to Sugar-Related Data Home Pages Main Data Directory: http://usda.mannlib.cornell.edu/cgi-usda/agency.cgi?ers#s U.S. Department of Agriculture (USDA): http://www.usda.gov Economic Research Service (ERS): http://www.econ.ag.gov World Agricultural Outlook Board (WAOB): http://www.usda.gov/agency/oce/waob/woab.htm National Agricultural Statistics Service (NASS): http://www.usda.gov/nass Reports ERS Sugar & Sweetener Situation and Outlook Reports (including text of Yearbook): http://mann77.mannlib.cornell.edu/reports/erssor/specialty/sss-bb ERS Sugar Yearbook Data (December 1996): http://mann77.mannlib.cornell.edu/data-sets/specialty/89019 U.S. Corn Sweetener Statistical Compendium (1993): http://www.mannlib.cornell.edu/data-sets/specialty/ Farm Sector Cost of Production (including sugarbeets and sugarcane 1992-95, and processing costs): http://www.econ.ag.gov/briefing/fbe/car/beets3.htm http://www.econ.ag.gov/briefing/fbe/car/cane3.htm World Agriculture Supply and Demand Estimate Report (WASDE): http://www.usda.gov/oce/waob/wasde/wasde.htm World Agricultural Outlook Board (WAOB): 1997 USDA Agricultural Outlook Forum Papers: http://www.usda.gov/agency/oce/waob/waob.htm February 1997 Outlook Forum, includes Baseline Table and Speech: http://mann77.mannlib.cornell.edu/data-sets/farm/94005/ gopher://usda.mannlib.cornell.edu:70/00/reports/waobr/aof/aof97/bbarry.asc World Ag Production, Foreign Agricultural Service (FAS): http://ffas.usda.gov/fasprograms/fas-commodity/circular/wap1.html Foreign Agricultural Service Report from Foreign Countries (includes sugar reports): http://www.fas.usda.gov/scriptsw/attacherep/attache_frm.idc Sweetener Market Data, Farm Service Agency (FSA): http://www.fsa.usda.gov/ao/epas/dsa/sugar/coversu.htm National Molasses Report, Agricultural Market Service (AMS): http://www.ams.usda.gov/lsg/mncs/ls_othr.htm END_OF_FILE