SUGAR AND SWEETENERS -- SUMMARY September 21, 2000 September 2000, ERS-SSS-229 Approved by the World Agricultural Outlook Board ----------------------------------------------------------------------------- This SUMMARY is published by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20036-5831. The complete text of the report will be available electronically about 1 week following this summary release. ----------------------------------------------------------------------------- USDA Institutes a Payment-in-Kind (PIK) Diversion Program for Beet Sugar On August 1, 2000, the U.S. Department of Agriculture (USDA) announced the Payment-in-Kind (PIK) Diversion Program to help sugarbeet and sugarcane farmers deal with low prices caused by an excess of domestic sugar. About 100,000 acres of sugarbeets were accepted under the PIK Diversion Program. Under the Program, sugarbeet producers could choose to divert a portion of their beet acreage from production in exchange for sugar held by the Commodity Credit Corporation (CCC). Farmers are limited to $20,000 in PIK payments. Final results of the PIK Diversion Program are not yet available. USDA projects fiscal year (FY) 2001 (October/September) beet sugar production at 4.670 million short tons, raw value (STRV). This projection does not take into account the potential effects of the PIK Diversion Program, but does take into account that the California beet processing plants in Woodland and Tracy will be out of operation from January to September 2001. Cane sugar production for FY 2001 is projected at a record 4.233 million STRV, about 3.6 percent above the estimated total for FY 2000. Production increases in Florida, Texas, and Puerto Rico are expected to more than offset declines in Louisiana and Hawaii. On September 15, 2000, the USDA established the FY 2001 tariff-rate quota (TRQ) for imports of sugar at 1,360,983 metric tons, raw value (MTRV), or 1,500,227 STRV. The total includes a quantity for raw sugar of 1,117,195 MTRV, the minimum level to which the United States is committed under the World Trade Organization (WTO); a quantity for refined sugar of 38,000 MTRV; a required quantity of 105,788 MTRV for Mexico under the North American Free Trade Agreement Side-Letter Agreement; and a reserve of 100,000 MTRV, to be allocated, if needed, contingent on developments in international markets. USDA has made all except the contingent quantity available to the U.S. Trade Representative for allocation for import into the U.S. customs territory. Other imports for FY 2001 in the September 2000 WASDE are projected to total 515,000 STRV, including 365,000 STRV under the combined Refined Sugar Re-export Program, the Sugar-Containing Products Program, and the Polyhydric Alcohol Program. Sugar derived from sugar syrup imports under the U.S. Harmonized Tariff Schedule Code 17029040 are expected to be at the same level as in FY 2000, about 125,000 STRV. High-tier tariff sugar imports for FY 2001 are projected to increase to 25,000 STRV. Sugar exports for FY 2001 are projected at 175,000 STRV. Deliveries to domestic food and other products manufacturers under the Sugar-Containing Products Re-export Program are projected at 125,000 STRV, and deliveries for the Polyhydric Alcohol Program are projected at 15,000 STRV. Total deliveries for FY 2001 are projected at 10.385 million STRV. After netting out deliveries made for the Sugar-Containing Products and Polyhydric Alcohol Programs, along with deliveries for livestock feeding (20,000 STRV), domestic food and beverage deliveries are projected at 10.225 million, about 1 percent higher than FY 2000. The USDA will not project FY 2001 ending stocks until the October World Agricultural Supply and Demand Estimates (WASDE), when more details about the PIK, possible TRQ shortfalls, and Certificates for Quota Eligibility (CQE) surrenders become known. Beet sugar production for FY 2000 is estimated at a record 4.950 million STRV. Cumulative extraction of sugar from 1999 crop beets is estimated at 291 pounds per ton, an 11-percent year-over-year increase. Cane sugar production for FY 2000 is estimated at 4.085 million STRV. Cane sugar production in Florida continued through April and is now estimated at 1.976 million STRV. Louisiana's harvest campaign ended in January, with actual sugar production equaling 1.620 million STRV. It is expected that 60,000 STRV of sugar from sugarcane will be produced from the coming harvest in September. Texas sugar production continued through late February for a total of 104,680 STRV. Cane sugar production in Hawaii for FY 2000 is estimated at 320,000 STRV, a decrease of more than 60,000 STRV from the previous year. Cane sugar production in Puerto Rico is estimated at 4,240 STRV. Only one plant operated this year because of hurricane damage to the other. The expected level of raw and refined sugar TRQ imports for FY 2000 is now estimated at 1.112 million STRV. The USDA announced on February 29, 2000, that it would accept CQE in lieu of required sugar exports during FY 2000 by the C&H Sugar Company. USDA's acceptance of CQE reduces the amount of sugar imported under the FY 2000 raw sugar TRQ. CQE surrendered to date total 121,251 STRV, leaving the raw sugar TRQ shortfall at 57,000 STRV for FY 2000. Other imports for FY 2000 are estimated at 523,000 STRV. U.S. sugar exports are comprised of exports under the Refined Sugar Re-export Program and are currently estimated at 125,000 STRV. Total deliveries for FY 2000 are estimated in the September 2000 WASDE at 10.25 million STRV. Ending stocks are currently estimated at 1.934 million STRV, indicating an ending stocks-to-use ratio of 18.6 percent. Sugar stocks held by the CCC are estimated at 297,000 STRV. Printed copies of the Sugar and Sweetener Situation and Outlook report will be available in about 2 weeks. 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