U.S. 2015 sugar carryover seen up 12%

(Food Business News) – The U.S. Department of Agriculture in its World Agricultural Supply and Demand Estimates on June 10 forecast U.S. sugar carryover on Oct. 1, 2015, at 1,807,000 short tons, raw value, up 200,000 tons, or 12%, from 1,607,000 tons forecast in May. The carryover on Oct. 1, 2016, was projected at 1,533,000 tons, down 14,000 tons from May and down 274,000 tons, or 15%, from this year.

The 2015-16 ending stocks-to-use ratio was projected at 12.6%, unchanged from May and compared with 15% forecast for the current year, which was revised up from 13.2% as the May forecast.

Increased carryover for the current year (2014-15) was the result of a 33,000-ton boost in forecast beet sugar production, to 4,795,000 tons, a 58,000-ton increase in tariff-rate quota imports, to 1,586,000 tons, and a 109,000-ton reduction in deliveries for food use, to 11,750,000 tons.

For 2015-16, projected beginning stocks were boosted by 200,000 tons from May to 1,807,000 tons, beet sugar production was raised by 270,000 tons from May, to 5,040,000 tons, imports from Mexico were reduced by 595,000 tons, or 28%, to 1,521,000 tons, and deliveries for food were reduced by 110,000 tons, to 11,875,000 tons, resulting in a 14,000-ton reduction in carryover to 1,533,000 tons.

“U.S. sugar beet beginning stocks for 2015-16 are increased by 200,523 short tons, raw value, due to changes made in the 2014-15 supply and use balances of greater early beet sugar production (33,480 tons) from the 2015-16 sugar beet crop, reduced tariff-rate quota shortfall (58,103 tons) and reduced deliveries for human consumption (108,940 tons),” the U.S.D.A. said. “U.S. beet sugar production for 2015-16 is forecast at 5.04 million tons, an increase of 269,569 tons and based on analysis of early planting and favorable weather, and also consistent with beet processors’ forecasts published in U.S.D.A.’s Sweetener Market Data. There is no change to cane sugar production.

“Imports for 2015-16 are forecast at 3.215 million tons, a reduction of 595,053 tons. This reduction results from lower expected 2015-16 sugar exports from Mexico to the United States based on the implied Target Quantity of U.S. Sugar Needs defined in the countervailing duty Suspension Agreement of Dec. 19, 2014, assuming a 2015-16 specialty sugar quota equal to the quota for 2014-15.”

The Suspension Agreement requires a minimum 13.5% U.S. stocks-to-use ratio. Even though the WASDE showed a 12.6% ratio for 2015-16, when the assumed specialty sugar quota is included, the ratio is brought up to 13.5%.

There were significant changes in supply-and-use numbers for Mexico, including a reduction in forecast 2014-15 production. The U.S.D.A. lowered current-year sugar production from May by 60,000 tonnes, actual weight, to 5.940 million tonnes. The lower number is more in line with trade estimates, although some in the trade still are lower. There were no other changes for 2014-15, resulting in forecast ending stocks of 847,000 tonnes, down 60,000 tonnes from May.

Projected Mexican sugar production for 2015-16 was unchanged from May at 6 million tonnes. Domestic use was raised by 58,000 tonnes, to 4.632 million tonnes, and exports were lowered by 509,000 tonnes, to 1.312 million tonnes, resulting in a 391,000-tonne boost in ending stocks to 1.059 million tonnes.