WASHINGTON — Refined beet and cane sugar prices for 2019-20 (beginning Oct. 1, 2019) are forecast at steady to firm levels compared with spot values, while trading is expected to remain slow until the 2019 beet crop is in the ground, according to speakers at the International Sweetener Colloquium in Miami Feb. 24-27.
Bulk refined beet sugar prices were forecast at around 35c a lb f.o.b. Midwest and refined cane sugar prices at around 37c f.o.b. Northeast by Frank Jenkins, president of JSG Commodities, and Craig Ruffolo, vice-president-commodity specialist, McKeany-Flavell Company.
Those price levels have been in the market for some time amid limited trade and are about flat with spot levels for 2018-19.
Beet processors and cane refiners at the Colloquium were in general agreement with the forecast price levels for next year based on what they have been offering, although buyers were hoping for lower prices if they wait longer. Both Mr. Jenkins and Mr. Ruffolo suggested there was little downside potential to 2019-20 sugar prices despite the prospect of record-high sugar production.
“When you come to the table, you better be ready to buy,” Mr. Ruffolo told the group of mostly sugar users at the meeting.
Sugar sales for next year have been slow, and neither speaker saw a reason sales should accelerate significantly any time soon, suggesting sales likely will remain slow until the beet crop is planted and more is known about the new crop. Mr. Ruffolo estimated that less than 20% of potential 2019-20 bulk needs have been covered.
He said flooding was inevitable (it was a question of when, not if) in the key Red River Valley this spring, which may delay sugar beet planting and reduce the amount of new-crop beet sugar available in the current marketing year (before Oct. 1). There is little sugar left to sell for the current year (although buyers also are well covered), and new crop supply generally is welcomed when sugar supplies tend to be tightest in the fourth quarter (July-September) of the marketing year.
The U.S. Department of Agriculture, at its annual Agricultural Outlook Forum Feb. 21-22, projected 2019-20 beet sugar outturn at a record 5,315,000 short tons, raw value, in 2019-20, up 8% from forecast production of 4,900,000 tons this year and up 0.7% from 5,279,000 tons in 2017-18, the current record. The U.S.D.A. expects an 8,000-acre, or 0.7%, increase in 2019 sugar beet planted area due to better returns relative to other crops with sugar beet yields and sugar content returning to trend levels from 2018-19.
Cane sugar production for 2019-20 was projected by the U.S.D.A. at 4,008,000 tons, down 2.6% from forecast record production of 4,117,000 tons for 2018-19 as outturn declines in Louisiana after two consecutive years of record production in the state.
The U.S.D.A. projected total sugar production in 2019-20 at a record 9,323,000 tons, up 3.4% from the current year forecast and up 0.3% from 9,293,000 tons in 2017-18, the current record.
Colloquium speakers suggested the current sugar market was stable and likely to remain so for the next year or so, barring a major weather event such as a hurricane, with domestic beet and cane sugar production strong and Mexico filling the void in cane sugar needs along with quota imports. The sugar program, though controversial, along with the suspension agreements between the United States and Mexico that controlled the flow of Mexican sugar exports to the United States, were working as expected, they said.