U.S.D.A. again cuts sugar ending stocks

by Ron Sterk
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WASHINGTON — The U.S. Department of Agriculture in its Aug. 12 World Agricultural Supply and Demand Estimates reduced its forecast of 2013-14 U.S. sugar ending stocks by 3% and reduced projected 2014-15 ending stocks by 42%, with the latter largely the result of expected lower imports from Mexico.

“Exports to the United States are reduced by 575,000 tonnes based on signed contracts confirmed by the U.S.D.A. committing Mexico to ship to non-U.S. destinations in that amount in 2014-15,” the U.S.D.A. said in its WASDE commentary.

The U.S.D.A. projected U.S. sugar carryover on Oct. 1, 2015, at 837,000 short tons, raw value, down 610,000 tons, or 42%, from 1,447,000 tons projected in July and down 917,000 tons, or 52%, from a downwardly revised 1,754,000 ton forecast as the carryover on Oct. 1, 2014.

The 2014-15 ending stocks-to-use ratio fell from 11.9% in July to 6.9% in August, and the 2013-14 ratio was lowered from 14.5% in July to 14.1% this month.

The stocks-to-use ratio for the current year is just below the low end of the U.S.D.A.’s targeted range. Next year’s ratio is far below the target range, indicating inadequate sugar supplies, and at a level that in the past has resulted in action by the U.S.D.A. to increase tariff rate quota imports, sources suggested.

The largest changes in the report were in 2014-15 U.S. sugar imports, and those were focused on Mexico.

Projected imports for next year that begins Oct. 1, 2014, were lowered 672,000 tons, or 19%, from July to 2,877,000 tons. Tariff rate quota imports were left at the World Trade Organization commitment minimum of 1,262,000 tons. Imports from Mexico were projected at 1,205,000 tons, down 672,000 tons, or 36%, from July. Total 2014-15 sugar supply was projected at 12,972,000 tons, down 610,000 tons, or 4%, from July and down 1,248,000 tons, or 9%, from 2013-14.

Trade sources indicated word of Mexico’s commitment to sell 575,000 tonnes of sugar into the world market (non-U.S.) became known Aug. 11. It was the first time since U.S. sugar producers filed antidumping and countervailing duty petitions against Mexico on March 28 that the WASDE has reflected the impact of potential import restrictions.

The U.S.D.A. projected 2014-15 domestic sugar production at 8,341,000 tons, up 116,000 tons from July based on cane sugar production increases of 5,000 tons in Florida and 120,000 tons in Louisiana partially offset by a 9,000-ton reduction in Texas.

For the current year (2013-14) the U.S.D.A. estimated domestic sugar production at 8,417,000 tons, down 25,000 tons from July based on a like reduction in Hawaiian cane sugar output. Imports for 2013-14 were forecast at 3,645,000 tons, down 29,000 tons from July based on an 87,000-ton decrease in tariff rate quote imports at 1,371,000 tons partially offset by a 58,000-ton increase in imports from Mexico at 2,054,000 tons. Total 2013-14 U.S. sugar supply was forecast at 14,220,000 tons, down 54,000 tons from July but up 36,000 tons from 2012-13.

Total U.S. sugar use in 2013-14 and 2014-15, including exports, food deliveries and other, all were unchanged from July.

Sugar production in Mexico in 2013-14 was forecast at 6.020 million tonnes, actual weight, down 5,000 tonnes from July. Total exports were estimated at 2,408,000 tonnes, up 50,000 tonnes, domestic use at 4,584 tonnes, down 106,000 tonnes, imports at 226,000 tonnes, unchanged, and ending stocks at 714,000 tonnes, up 51,000 tonnes, or 8%, from the July forecast.

For 2014-15 Mexican sugar production was forecast at 6.140 million tonnes, unchanged from July, imports at 399,000 tonnes, down 51,000 tonnes, or 11%, domestic use at 4.69 million tonnes, unchanged, and exports at 1.616 million tonnes, also unchanged. Ending stocks for 2014-15 were unchanged from July at 947,000 tonnes as lower imports offset higher beginning stocks.
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