SUGAR AND SWEETENERS OUTLOOK -- SUMMARY May 20, 2004 May 2004, ERS-SSS-240 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 report will be available electronically about 1 week following this summary release. ----------------------------------------------------------------------------- Per Capita Deliveries of Sweeteners Decrease for Fourth Straight Year U.S. deliveries of sweeteners for 2003 are estimated at 20.594 million tons. Sweeteners include refined sugar, corn sweeteners (high fructose corn syrup (HFCS), glucose syrup, and dextrose), honey, and other edible syrups. With the exception of edible syrups, deliveries are down from 2002 in each of the sweetener categories. Especially notable is the decrease in domestic deliveries of refined sugar of 216,000 tons and of HFCS of 176,000 tons. On a per capita basis, U.S. sweetener deliveries for 2003 are equal to 141.5 pounds, down 4.7 pounds from 2002, and down 9.8 pounds from the per capita high, set in 1999, of 151.4 pounds. Prior to 1995, sugar contained in imports was pretty much offset by sugar contained in U.S. food exports, indicating only a minor positive adjustment to total deliveries. Beginning in the 1995-96 period, sugar-containing product imports started increasing at a faster rate than U.S. sugar-containing product exports. Added sugar from imported products has grown from 83,000 tons in 1996 to 535,000 tons in 2003. On a per capita basis, the sugar in net imported product added 3.7 pounds to total per capita sweetener availability in 2003. Estimates of human consumption of refined sugar and HFCS have continued to decline after reaching record-high levels in 1999. Per capita consumption of domestically delivered sugar is estimated at 205 calories per day. Adding in sugar from estimated net imported product brings the total to 218 calories per day, about the same level as in 1993. Daily average intake of HFCS in 2003 is estimated at 205 calories, down 10 calories from 1999. On May 12, 2004, the U.S. Department of Agriculture (USDA) released its latest supply and use estimates for fiscal year (FY) 2004 and projections for FY 2005 in the World Agricultural Supply and Demand Estimates (WASDE) report. In the May WASDE, the USDA returns to reporting estimates and projections for sugar deliveries (as it did prior to the November 2003 WASDE) rather than sugar sales. Beginning and ending stock estimates and projections include all sugar held in inventory by the processor/refiner, including sugar held for others prior to delivery, as well as sugar owned by the processor/refiner. Assuming a return to normal sucrose levels and trend improvement in productivity, USDA projects national beet sugar production for FY 2005 at 4.520 million short tons, raw value (STRV). This projection is 355,000 STRV less than the FY 2004 estimated production. USDA projects FY 2005 cane sugar production at 4.07 million STRV, with small reductions from FY 2003 in all cane- producing States, except Louisiana. Although the USDA has not announced the sugar tariff-rate quota (TRQ) for FY 2005, it is provisionally projected at 1.206 million STRV. This amount is equal to the U.S. commitment to the World Trade Organization (WTO) to allocate a minimum quantity of imports of raw and refined sugar (1.256 million STRV), less a projected shortfall of 50,000 STRV. Sugar in imported products have continued its growth and have displaced domestic sugar deliveries. For the first half of FY 2004, sugar in imported products is 50,000 STRV higher than the same period in FY 2003. From FY 2002 to FY 2003, domestic sugar deliveries for food and beverage use fell an estimated 320,000 STRV. With half of the data in for FY 2004 (that is, October 2003 through March 2004), USDA projects sugar deliveries for food and beverage use at 9.67 million STRV. USDA estimates ending stocks for FY 2004 at 2.223 million STRV and ending stocks for FY 2005 at 2.350 million STRV. Corresponding ending stocks-to-use ratios are 22.10 percent for FY 2004 and 23.37 percent for FY 2005. On April 9, 2004, the USDA announced that the Overall Allotment Quantity (OAQ) for domestic sugar is officially reduced from the 8.550 million STRV announced on August 13, 2003, to 8.250 million STRV. This action formally eliminates the 300,000 STRV portion of the original OAQ that was not allocated on September 30, 2003, due to uncertainty surrounding consumption, production, and stock projections. The OAQ for FY 2005 is expected to be announced in July 2005, a month earlier than normal. The USDA forecasts Mexican sugar production for 2004/05 at 5.410 million metric tons, raw value (MTRV). Some of the higher technology mills are reportedly increasing area planted and the level of field fertilization due to the expected continuation of high domestic sugar prices. The USDA projects human domestic sugar consumption at 5.35 million MTRV for 2004/05. With the assumed maintenance of the tax on beverages that use HFCS, all sweetener demand from the soft drink industry will be for sugar. The industry grew between 2 and 2.5 percent in 2003 and is expected to grow 3.5 percent in 2004. The USDA projects sugar exports for 2004/05 at 66,000 MTRV, the same level as in 2003/04. Exports to the United States for 2004/05 are expected to be small. END_OF_FILE