(AgWeek) – The U.S. Agriculture Department (USDA) on Tuesday hiked its forecast for sugar imports by the country’s cane refiners by more than one-quarter, as sweetener companies take advantage of U.S. prices trading well above global levels.
The U.S. government again lowered its outlook for domestic supplies in the current 2015/16 crop year as lower sugarbeet yields and production offset the higher projected imports as well as higher than previously expected cane output.
Cane refiners will bring in 300,000 tons of sugar in 2015/16 through a re-export program that allows them to buy a ton of raw sugar at world prices for every ton they export. That forecast was up from 238,000 tons projected in January, as a move by Mexico to curb imports raised expectations of less trade between the U.S. cane refiners and sweets and food manufacturers in its North American neighbor.
High local prices will help to boost refiners’ incentive to import through the program, the USDA said. Global front-month raw sugar futures on ICE Futures U.S. traded at 13.41 cents per lb on Tuesday, nearly half the price of ICE U.S. domestic raw sugar prices of about 25.45 cents per lb.
The USDA projected the closely watched stocks-to-use ratio at 12.8, down from 13.0 last month and 14.4 in the previous marketing year in its monthly supply and demand report. The reduction put the key figure below a target outlined in a trade agreement with Mexico, raising the prospect sugar buyers will increase their calls for more imports.
Total U.S. sugar production will be 8.8 million short tons in the crop year that began in October 2015, down slightly from last month’s projection of 8.9 million tons but still up from the 2014/15’s output of 8.6 million tons, the USDA said.
