SUGAR AND SWEETENERS YEARBOOK -- SUMMARY May 18, 2000 May 2000, ERS-SSS-228 Approved by the World Agricultural Outlook Board ----------------------------------------------------------------------------- SUGAR AND SWEETENERS 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 SUGAR AND SWEETENERS report -- tables and graphics are not included. Subscriptions to the printed version of the report are available from the ERS-NASS order desk. Call, toll-free, 1-800-999-6779 and ask for stock # SUB-SSS-4033, $25/2 issues. ERS-NASS accepts MasterCard and Visa. ----------------------------------------------------------------------------- USDA To Purchase 150,000 Tons of U.S. Sugar On May 11, 2000, Agriculture Secretary Glickman announced that the U.S. Department of Agriculture (USDA) will seek to buy U.S. sugar to reduce the cost of expected sugar program loan forfeitures, support sugar growers, and help stabilize low market sugar prices (press release #0159.00). According to the press release, at least 75 percent of the initial approximately 150,000-ton purchase will be refined sugar and may be followed by additional purchases depending on price and market conditions. USDA expects to save as much as $6 million in administrative costs that the government might otherwise incur from expected loan forfeitures later this summer. The Commodity Credit Corporation (CCC) will purchase the sugar using its authority under the cost reduction options of the Food Security Act of 1985. For now, the CCC plans to store the purchased sugar and will not sell it back into a depressed U.S. sugar market. Beet sugar production for fiscal year (FY) 2000 is estimated at 4.950 million short tons, raw value (STRV). The National Agricultural Statistics Service (NASS) estimated the sugarbeet crop at 33.319 million tons. Area harvested is estimated at 1.527 million acres, and yield is estimated at 21.8 tons per acre. Both sugarbeet acreage harvested and production represent records. Although winter weather conditions were less than ideal for storage, the beets entered storage in good condition and remained in good shape through the winter months. Cane sugar production for FY 2000 is estimated at a record 4.130 million STRV. NASS estimated the U.S. sugarcane for sugar crop at 33.736 million tons. Area harvested is estimated at 940,400 acres, and yield is estimated at 35.9 tons per acre. Both sugarcane acreage harvested and production, if realized, would represent records. Production was particularly strong in Louisiana, where increased acreage harvested and yields combined to produce a record crop. The expected level of sugar tariff-rate quota (TRQ) imports for FY 2000 is now estimated at 1.204 million STRV. As of May 1, 2000, total raw TRQ sugar amounting to 430,316 STRV had entered the U.S. customs territory, or about 34 percent of the amount projected to enter for the fiscal year. As of May 1, 2000, 34,190 STRV or about 89 percent of the remaining refined sugar TRQ, apart from the North American Free Trade Agreement (NAFTA) allocation to Mexico of 27,558 STRV, had entered. Other imports for FY 2000 are estimated at 523,000 STRV. Most of these imports enter under special programs: the Refined Sugar Re-export Program (250,000 STRV), the Sugar-Containing Products Program (125,000 STRV), and the Polyhydric Alcohol Program (15,000 STRV). Estimated sugar derived from sugar syrups entering under HTS 17029040 are at 125,000 STRV. Monthly sugar syrup imports have been steady through February and are expected to maintain the established pace. High-tier tariff imports are estimated at 8,000 STRV. Total deliveries for FY 2000 are estimated at 10.25 million STRV. Deliveries through the end of March amounted to 4.957 million STRV, about 3.7 percent higher than last year through March. Deliveries by beet processors have been particularly strong, 2.2303 million STRV through March, or about 7.2 percent higher than the same period last year. Deliveries by cane refiners, on the other hand, are near the same level as last year, 2.710 million STRV. NASS forecasts sugarbeet area planted for FY 2001 at 1.578 million acres, about 1 percent higher than FY 2000. Beet sugar production for FY 2001 is projected at 4.700 million STRV, with an aggregate U.S. sugar yield expected to be about 3.10 tons per acre. Projection updates throughout the year will continue to take into account the possible plant closings in California beet producing areas. Cane sugar production for FY 2001 is projected at 4.323 million STRV. This sum represents the aggregation of projected production in Florida (2.090 million STRV), Louisiana (1.720 million STRV), Texas (160,000 STRV), Hawaii (330,000 STRV), and Puerto Rico (22,500 STRV). The raw and refined sugar TRQ for FY 2001 has not been established. Other imports for FY 2001 are projected to total 448,000 STRV, including 175,000 STRV under the Refined Sugar Re-export Program, 125,000 under the Sugar-Containing Products Program, and 15,000 under the Polyhydric Program. Sugar syrups under HTS 17029040, and high-tier tariff sugar imports are expected to be at the same levels as in FY 2000. Deliveries for FY 2001 are projected at 10.385 million STRV. This level represents growth over the previous year of 1.3 percent, which is less than the growth of 1.8 percent for FY 2000. Deliveries to industrial users are projected up 2.0 percent, while deliveries to non-industrial users are up 0.3 percent. The U.S. Embassy's Office of Foreign Agricultural Affairs in Mexico City current estimates Mexican sugar production for 1999/2000 at 5.070 million metric tons, raw value (MTRV). Area harvested for sugarcane are estimated at 627,000 hectares, and sugarcane production is estimated at 43.365 million metric tons. The implied sugar recovery rate from the sugarcane is 11.7 percent, which, if realized, would be a record. Sugar consumption for 1999/2000 is estimated at 4.482 million MTRV and exports are estimated at 630,000 MTRV. The U.S. Embassy's Office of Foreign Agricultural Affairs in Mexico City currently forecasts Mexican sugar production for 2000/01 at 5.090 million MTRV. Area harvested for sugarcane is projected at 630,000 hectares, and sugarcane production is projected at 44 million metric tons. Sugar consumption for 2000/01 is projected at 4.482 million MTRV, the same as for 1999/2000, and exports are projected at 700,000 MTRV. On October 1, 2000, Mexico's duty-free access to the U.S. market, as set out in the side-letter agreement to the original NAFTA, increases to the smaller of 250,000 MTRV or Mexico's "net surplus production," which accounts for Mexican consumption of high fructose corn syrup. Printed copies of the Sugar and Sweeteners Situation and Outlook Yearbook will be available in about 2 weeks. This issue contains a special article entitled "Returns from Mexican Sugar Processing", which measures the contribution to economic returns of capacity usage, technological adaption, and output prices. For more information, contact Stephen Haley, 202-694-5247. The text of the report will also be available electronically via the ERS website at www.ers.usda.gov. END_OF_FILE