SUGAR AND SWEETENERS OUTLOOK -- SUMMARY May 24, 2007 May 2007, ERS-SSS-249 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. ----------------------------------------------------------------------------- The USDA Projects U.S. and Mexican Sugar Supply and Use for Fiscal Year 2008 At the end of March 2007, the National Agricultural Statistics Service (NASS) projected 2007 crop year sugarbeet acreage intentions at 1.295 million acres, about 5.3 percent lower than 2006 crop year area planted. Assuming normal sucrose levels and trend improvement in productivity, the U.S. Department of Agriculture (USDA) projects fiscal year (FY) 2008 national beet sugar production at 4.520 million short tons, raw value (STRV). This projection is about 494,000 STRV less than USDA’s estimate of FY 2007 production (5.014 million STRV). The USDA projects FY 2008 cane sugar production at 3.735 million STRV, an increase of 245,000 STRV over FY 2007. The USDA projects Florida and Louisiana sugar yields to increase above 7.0 percent over last year’s levels. Assuming the same sugarcane area harvested for sugar as last year, the USDA projects Florida production at 1.870 million STRV and Louisiana production at 1.430 million STRV. Using similar methodology, the USDA projects FY 2008 Texas cane sugar production at 206,000 STRV and Hawaii cane sugar production at 229,000 STRV. Although the raw and refined sugar tariff-rate quotas (TRQ) for FY 2008 have not yet been announced, the USDA projects them in the WORLD AGRICULTURAL SUPPLY and ESRIMATES (WASDE) report at minimum levels implied by existing international commitments to the World Trade Organization (WTO), and the Dominican Republic and Central American Free Trade Agreement (DR-CAFTA). The projection in the May WASDE is, therefore, at 1.284 million STRV, assuming a shortfall of 70,000 STRV. Included in the total minimum access quantity is the refined sugar TRQ, the minimum access commitment of which is 24,251 STRV, or 22,000 metric tons, raw value (MTRV). The TRQ allocation to Mexico under the North American Free Trade Agreement (NAFTA) has not yet been announced. The USDA projects imports from Mexico outside the TRQ at 75,000 STRV. Other program sugar imports outside the sugar TRQ for FY 2008 are projected to total 425,000 STRV. Other USDA import programs include the Refined Sugar Re-export Program, the Sugar-Containing Products Program, and the Polyhydric Alcohol Program. Other nonprogram imports for FY 2008 are projected at 5,000 STRV. Sugar exports for FY 2008 are forecast at 250,000 STRV, a decrease of 125,000 STRV from the level estimated for FY 2007. About 80 percent of these exports are expected to go to Mexico where they are used in Mexico’s product re-export program. Almost all such sugar-containing products are expected to be exported to the United States, where they substitute for U.S. products that use domestically delivered sugar. Deliveries for domestic food and beverage use for FY 2008 are projected at 10.000 million STRV, a modest increase of 50,000 STRV over the FY 2007 delivery estimate. Deliveries for domestic food and beverage consumption for FY 2007 were decreased by 150,000 STRV to 9.950 million STRV in the April 2007 WASDE. Deliveries for the first 6 months of the fiscal year have only amounted to 4.714 million STRV, which is 293,000 STRV less than the total for the corresponding period last year. Although much of the poor performance can likely be attributed to early-season, unrecorded draw-downs of sugar stocks held by entities that do not report to the USDA, deliveries have not picked up as expected in January through March. As it is, deliveries for the remaining 6 months of the fiscal year will have to exceed last year’s total of 5.177 million STRV April through September by over 60,000 STRV to reach the 9.950 million STRV forecast. The projection for the Sugar-Containing Product Re-export deliveries is 125,000 STRV, a decrease of 25,000 from the FY 2007 estimate. The FY 2008 projection for deliveries for the manufacture of polyhydric alcohol is 25,000 STRV and is 20,000 STRV for feed uses, the same as the FY 2007 estimates. Ending stocks are the difference between supply and use. For FY 2008, ending stocks are projected at 1.340 million STRV, implying an ending stocks-to-use ratio of 12.9 percent. For FY 2007, ending stocks are estimated at 1.716 million STRV, implying an ending stocks-to-use ratio of 16.3 percent. The USDA projects FY 2008 Mexican sugar production at 5.618 million metric tons, raw value (MTRV), an increase of 318,000 MTRV above this year’s estimated level of 5.300 million MTRV. Sugarcane area harvested is projected at 660,000 hectares, an increase of 15,000 hectares over FY 2007. Sugarcane production for FY 2008 is projected at 47.600 million metric tons (mt), implying sugar recovery at 11.8 percent, raw basis (11.1 percent, tel quel basis). The USDA projects FY 2008 Mexican sugar deliveries for human consumption at 5.400 million MTRV, an increase of 50,000 MTRV over FY 2007. Consumption of high fructose corn syrup (HFCS) is projected at 750,000 mt, dry basis, an increase of 50,000 mt over the corresponding level in FY 2007. Mexican sugar exports are projected at 75,000 MTRV, and deliveries to Mexico’s sugar-containing re-export program (formerly PITEX, now IMMEX) are projected at 335,000 MTRV. Ending stocks are projected at 1.373 million MTRV, implying a stocks-to- consumption ratio of 25.4 percent. END_OF_FILE