WASHINGTON — The US Department of Agriculture, in its March 9 World Agricultural Supply and Demand Estimates report, lowered from February forecast sugar imports from Mexico as expected but also raised US sugar production and lowered deliveries, resulting in a higher-than-expected ending stocks-to-use ratio of 15.1% for the current 2020-21 marketing year.
Deliveries for food were forecast at 12,125,000 tons, raw value, down 75,000 tons from the February forecast and down 191,000 tons, or 1.6%, from 2019-20. Other delivery categories were unchanged from February, with total use forecast at 12,265,000 tons, down 75,000 tons from February and down 284,000 tons from a year earlier.
Deliveries for human consumption were reduced “on the slow pace through one-third of the fiscal year,” the USDA said. “These deliveries have been difficult to project because of the unusually high direct consumption imports of 204,670 tons recorded as entering in September of 2019-20 but unlikely to have been delivered to actual end users until sometime in 2020-21. A precise allocation is difficult to establish but this season’s slow pace of recorded deliveries is indicative of the effect.”
Domestic production in 2020-21 was forecast at a record 9,374,000 tons, up 62,000 tons from February and up 1,225,000 tons, or 15%, from 2019-20 when adverse weather lowered both beet and cane production. Beet sugar production was forecast at 5,093,000 tons, up 46,895 tons from the prior month and up 742,000 tons from last year. Cane sugar production was forecast at a record 4,281,000 tons, up about 16,000 tons from February as a 17,666-ton increase in Louisiana was only partially offset by a 2,252-ton decrease in Texas.
“Beet sugar production is increased … on a projected increase in national sucrose recovery to 15.275%,” the USDA said. “Recoveries in all regions including the Upper Midwest are projected to be above-average high levels. Processor forecasts of beet pile shrink have not varied much during the campaign. Estimates of an above-average proportion of sugar beets sliced relative to beets harvested through the end of January is a sign of reduced probability of shrink for the remainder of the campaign. Processors indicate that recent above-average temperatures are not a major concern for shrink.”
The decrease from February in deliveries was not a surprise to the trade, although some expected domestic beet sugar production to be lowered, and disagreement remains about that forecast. Many had expected an ending stocks-to-use ratio closer to 14.2%. How much impact the relaxing of COVID-19 restrictions have on sugar deliveries (demand) in the remainder of the year remains a major unknown.
Re-export imports were forecast at 300,000 tons, down 50,000 tons from February and down 132,000 tons from 2019-20 “on the slow pace to date and the likelihood of a continuation of lower margins between US and world raw sugar prices,” the USDA said.
Imports from Mexico were forecast at 931,000 tons, down 232,000 tons from February and down 445,000 tons from last year as expected.
“Exports (from Mexico) to the United States this month are adjusted in Mexico by the new export limit to be established by the US Department of Commerce after the publication of this March 2021 WASDE as set out in the Anti-Dumping/Countervailing Duty Suspension Agreement,” the USDA said. “Because the export limit set by Commerce in December 2020 is larger than US needs based on this WASDE, the export limit is project to be set at 794,146 tonnes, the same as set by Commerce in December. Added to this is a small amount exported to the United States in October 2020 from last year’s allocation to bring the total to 796,528 tonnes, or 903,703 tons. Exports to third countries that can include exports to the US re-export import program are residually projected at 695,475 tonnes.”
Total domestic sugar supply in 2020-21 was forecast at 14,113,000 tons, down 220,000 tons from February and down 53,000 tons from 2019-20.
There were no changes from February to estimates for 2019-20.
The USDA forecast Mexico’s 2020-21 sugar production at 5,900,000 tonnes, actual weight, down 50,000 tonnes from February but up 622,000 tonnes from last year’s drought-reduced output. Domestic use was forecast at 4,445,000 tonnes, down 35,000 tonnes from February, with exports forecast at 1,492,000 tonnes, up 2,000 tonnes. Lower exports to the United States are applied residually to third-country exports, leaving the total little changed. Ending stocks for 2020-21 were forecast at 926,000 tonnes, down 9,000 tonnes from February but up 68,000 tonnes from the prior year.