The U.S. Department of Agriculture on Wednesday hiked its forecast for sugar supplies in the 2015/16 marketing year on a higher outlook for sugar imports, a move expected to ease concern over a raw supply shortage for the country’s cane refiners.
The USDA raised the closely watched stocks-to-use ratio to 13.5 from 12.8 last month on expectations of higher sugar imports after the U.S. government reallocated quotas to some producers this week.
The move reduced the expected shortfall in domestic supplies and also the need for imports from other suppliers, like Mexico.
Total sugar imports in the 2015/16 crop year through the end of September will be 3.20 million tons, up slightly from a February forecast of 3.16 million tons, the USDA said.
The move will probably reduce pressure on the country’s cane refiners, which have said they are facing a supply crunch.
The USDA pegged imports through a tariff-rate quota program at 1.59 million short tons (1.43 million tonnes), up from February’s forecast of 1.51 million tons after the government this month reallocated more than 90,000 tons of quota.
The agency lowered its estimate for supplies from Mexico by about 33,400 tons to 1.30 million tons. Mexico is allotted a quota based on the government forecast.
U.S. production was pegged at 8.83 million tons, down slightly from last month’s projection of 8.85 million tons due to difficult harvest conditions in Florida.
