U.S. sugar carryover on Oct. 1, 2015, was projected at 2,188,000 short tons, raw value, up 20% from the February forecast of 1,825,000 tons for carryover on Oct. 1, 2014, according to data released at the U.S. Department of Agriculture’s annual Agricultural Outlook Forum on Feb. 21.
The 2014-15 ending stocks-to-use ratio was projected at 17.9%, well above 14.9% expected in the current year, equal to the ratio in 2012-13 and well above the U.S.D.A.’s targeted ratio near 15%.
The 2014-15 projections included record high U.S. beet sugar production, imports from Mexico, total U.S. supply and ending stocks, which may lead to a second consecutive year of U.S.D.A. intervention to remove excess sugar from the U.S. market.
“Because a low U.S.-world raw sugar price margin of 3c per lb is expected to keep the July-September U.S. raw sugar price below the minimum price-to-avoid forfeiture, the U.S.D.A. may have to take action to reduce supply such as purchasing sugar for resale to ethanol producers,” the department said in comments accompanying the data.
The U.S.D.A. forecast U.S. 2014-15 sugar production at 8,920,000 tons (beet at a record 5,109,000 tons and cane at 3,811,000 tons), up 2% from 2013-14 but below the record of 8,980,000 tons produced in 2012-13.
Total imports were projected at 3,671,000 tons in 2014-15, up 15% from the current year, with imports from Mexico seen at a record 2,262,000 tons, up 30% from this year, and tariff rate quota (T.R.Q.) imports at 1,009,000 tons, down 24%.
“(T.R.Q.) shortfall is projected at a high level of 552,000 short tons, raw value, due to strong competition from raw sugar imported from Mexico in an environment of low world raw sugar prices averaging 16.97c per lb,” the U.S.D.A. said.
Total U.S. sugar supply was projected at 14,416,000 tons, up 2.5% from 2013-14.
U.S. domestic sugar use in 2014-15 was projected at 11,979,000 tons, down slightly from 2013-14, with food deliveries at 11,559,000 tons, up about 1% from the current year “in line with population growth.” Total sugar use was seen at 12,229,000 tons, down slightly from the current year due to a lower estimate for the “other” use category, which includes transfers to sugar-containing products for re-export and for feed and nonedible alcohol/ethanol. The “other” category was boosted to a high level in 2013-14 due to the U.S.D.A.’s exchange of excess sugar for re-export credits in an effort to avoid loan forfeitures.
“Lower price high-fructose corn syrup relative to refined sugar limits some of sugar’s gain of the last several years,” the U.S.D.A. said.
The U.S.D.A. projected 2014-15 sugar production in Mexico at 6.939 million tonnes, up 9% from the 2013-14 forecast and just below the 2012-13 high of 6.975 million tonnes.
“Area expansion, along with investments made in the last several years of high producer returns, is expected to outweigh effects from recent declines in Mexican sugar prices,” the U.S.D.A. said. “Sweetener consumption increases with projected population growth but lower priced HFCS is expected to displace sugar in beverage use and some food manufacturing.”
The ending stocks-to-human use ratio was projected at a high 32.4%, similar to 2012-13, with “all but insignificant amounts (of excess supply) expected to be exported into the U.S. market,” the U.S.D.A. said.
