SUGAR AND SWEETENERS -- SUMMARY September 26, 2002 September 2002, ERS-SSS-235 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 Sets 2002 Crop Allotment for Sugar The U.S. Department of Agriculture (USDA) has established flexible marketing allotments for sugar for the 2002 crop year. The overall allotment quantity (OAQ) of sugar for a crop year is determined by subtracting the sum of 1.532 million short tons, raw value (STRV) and carry-in stocks of sugar from the USDAs estimate of sugar consumption and reasonable carryover stocks at the end of the crop year. The OAQ is divided between refined beet sugar at 54.35 percent of the overall quantity and raw cane sugar at 45.65 percent of the overall quantity. On August 1, USDA made preliminary forecasts of fiscal year (FY) 2003 (or 2002-crop) consumption, reasonable carryover stocks, carry-in stocks, production, and imports in accordance with provisions of the 2002 Farm Act. These forecasts were re-evaluated following the release of more current market information in the August 12, 2002, World Agricultural Supply and Demand Estimates (WASDE) report. On August 27, the Commodity Credit Corporation (CCC) announced the OAQ for sugar for FY 2003. It was set at 7.700 million STRV. The resulting sector allocations were set: beet sugar: 4.185 million STRV cane sugar: 3.515 million STRV. The USDA pledged to make appropriate adjustments to the OAQ in order to avoid forfeitures and to ensure an adequate sugar supply for the domestic market in FY 2003. The USDA projects FY 2003 beet sugar production at 4.375 million STRV. The National Agricultural Statistics Service (NASS) forecasts sugarbeet area harvested at 1.371 million acres, an increase of 127,200 acres compared with last years total that was low because of the 2001 Payment-in-Kind (PIK) Diversion program. NASS forecasts sugarbeet production at 28.495 million tons. Based on a sugarbeet yield projection of 20.8 tons per acre, and assuming trend productivity growth and sucrose content slightly above the previous year (17.3 percent), national sugar yield is projected at 3.154 tons per acre. The USDA projects FY 2003 cane sugar production from Florida, Louisiana, Texas, Hawaii, and Puerto Rico at 4.070 million STRV. Florida cane sugar production is projected at 2.020 million STRV. NASS forecasts Florida sugarcane acreage harvested for sugar and seed at 455,000 acres, a decrease of 10,000 acres from last year. Sugarcane growing conditions have been favorable, with good moisture and warm growing conditions. NASS forecasts yield at 36.4 tons/acre, up 1.3 tons compared with last years harvest. Sucrose recovery is expected to be 12.75 percent. Louisiana cane sugar production is projected at 1.60 million STRV. NASS forecasts Louisiana sugarcane acreage harvested for sugar and seed at 495,000 acres, the same as last year, and it forecasts yield at 30.0 tons/acre, 1 ton/acre higher than last year. Sugar recovery is expected to be 11.6 percent, about the average rate of the last 5 years. Texas sugar production for FY 2003 is projected at 175,000 STRV. NASS forecasts area harvested for sugar and seed at 49,000 acres, 2,000 acres more than last year. The NASS yield forecast, however, reflects difficult growing conditions --it is forecast down 9.7 tons/acre to 32.0 tons/acre. Hawaii sugar production for FY 2003 is projected at 275,000 STRV. The bulk of the harvest season takes place a year away; thus, the projection assumes normal weather conditions. On July 30, 2002, the USDA established the FY 2003 tariff-rate quota (TRQ) for imports of raw cane sugar into the United States at 1,117,195 metric tons, raw value (MTRV), or 1,231,497 STRV. This amount represents the level to which the United States is committed under the Uruguay Round Agreement. The allocation for Mexico provided for under the North American Free Trade Agreement (NAFTA) has not been determined yet. In addition, USDA has established the FY 2003 refined sugar TRQ at 37,000 MTRV (40,786 STRV) for which the sucrose content, by weight, in the dry state, must have a polarimeter reading of 99.5 degrees or more. This refined sugar TRQ includes 22,000 MTRV, the minimum level to which the United States is committed under the Uruguay Round Agreement, and an additional 15,000 MTRV for specialty sugars. Other program sugar imports outside the sugar TRQ for FY 2003 are projected to total 260,000 STRV. Other USDA import programs include the Refined Sugar Re-export Program, the Sugar-Containing Products Program, and the Polyhydric Alcohol Program. Non-program imports for FY 2003 are projected at 60,000 STRV. This total includes 50,000 STRV of sugar contained in molasses imported for the commercial extraction of refined sugar (HTS 1703.10.30). High-tier tariff imports from Mexico are projected at 10,000 STRV. Sugar exports are projected at 125,000 STRV, the same as the current fiscal year. Deliveries for domestic food and beverage use for FY 2003 are projected at 9.8 million STRV, an increase of 100,000 STRV or 1 percent over FY 2002. Deliveries to non- industrial endusers will likely increase along with population growth. National economic recovery should help demand for products that contain sugar. A continuing worry will be the upward trend in imported products that contain sugar. Ending stocks are projected at 1.554 million STRV, implying an ending stocks-to-use ratio of 15.38 percent. END_OF_FILE