SUGAR AND SWEETENERS OUTLOOK -- SUMMARY May 24, 2005 May 2005, ERS-SSS-243 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. ----------------------------------------------------------------- USDA Projects Less Beet Sugar Production in FY 2006 Than FY 2005 The National Agricultural Statistics Service (NASS) published 2005 crop year sugarbeet acreage intentions for planted area at the end of March. Acreage intentions were about 3.5 percent lower than 2004 crop year area planted -- 1.299 million. Acreage reductions are largest for the Far Western region (11.2 percent) and the Great Lakes region (10.7 percent). For the first time since 1982, there is no area planted to sugarbeets in Ohio. Assuming a return to normal sucrose levels from last year’s high levels and trend improvement in productivity, the U.S. Department of Agriculture (USDA) projects fiscal year (FY) 2006 national beet sugar production at 4.37 million short tons, raw value (STRV). This projection is 323,000 STRV less than USDA’s estimate of FY 2005 production (4.693 million STRV). The USDA projects cane sugar production at 3.77 million STRV. Florida sugar production is projected to recover from the poor weather-related FY 2005 output to 1.95 million STRV, an increase of 265,000 STRV. A more modest recovery is projected for Louisiana at 1.40 million STRV, an increase of 137,000 STRV over last year’s disappointing results (1.263 million STRV). FY 2006 Texas cane sugar production is projected at 170,000 STRV, and Hawaii cane sugar production is projected at 250,000 STRV. All producers have felt the effects of higher energy costs. Although the USDA has not announced the sugar tariff-rate quota (TRQ) for FY 2006, 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 access quantity of imports of raw and refined sugar (1.256 million STRV), less a projected shortfall of 50,000 STRV. Included in the total minimum access quantity is the refined sugar TRQ whose minimum access commitment is 24,251 STRV, or 22,000 metric tons, raw value (MTRV). Other program sugar imports outside the sugar TRQ for FY 2006 are projected to total 325,000 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 2006 are projected at 60,000 STRV. This total includes 30,000 STRV of sugar contained in molasses imported for the commercial extraction of refined sugar (HTS 1703.10.30), 20,000 STRV of thick juice sugar syrup (HTS 1702.90.40), and high-tier tariff imports at 10,000 STRV. The USDA projects FY 2006 exports at 200,000 STRV, a decrease of 40,000 STRV from the estimated FY 2005 level of 240,000 STRV. For the first time since FY 1999, domestic deliveries in FY 2004 grew relative to the previous year -- by 174,000 STRV to 9.678 million STRV. For the first two quarters of FY 2005, deliveries for food and beverage use have summed to 4.889 million STRV, an increase of 2.1 percent relative to the same period in FY 2004. For the entire FY 2005, deliveries are estimated at 9.875 million STRV. At the same time, sugar in imported products has continued its growth and has certainly displaced domestic sugar deliveries. Sugar in imported products in the first two quarters of FY 2005 has totaled 540,000 STRV, an increase of 8.2 percent relative to the same period in FY 2004. The USDA projects FY 2006 sugar deliveries for food and beverage use at 9.950 million STRV. This projection assumes growth of less than 0.8 percent over the current fiscal year estimate. Ending stocks are the difference between supply and use. For FY 2005, they are estimated at 1.343 million STRV, implying an ending stocks-to-use ratio of 13.09 percent. If realized, the ratio would be the lowest since FY 1995 (12.6 percent). For FY 2006, ending stocks are projected at 759,000 STRV, implying an even lower ending stocks-to-use ratio of 7.4 percent. Marketing allotments for FY 2006 have not yet been announced. Marketing allotments for FY 2005 remain unchanged at 8.1 million STRV. On April 29, 2005, however, the USDA announced the reassignment of unused cane sugar allocations from processors in Hawaii and Louisiana to processors in Florida and Texas. No allocation adjustments were necessary for the beet sugar sector.