USDA announces intent to ensure adequate sugar supply as production estimates decline

USA – The U.S. Department of Agriculture (USDA) has announced that it fully intends to take appropriate actions to ensure an adequate supply of sugar to the US market.

In the recent past, prospects for US sugar production have declined significantly due to adverse weather in both sugar beet and sugarcane regions.

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In the November 2019 World Agricultural Supply & Demand Estimates Report, the US sugar production projection declined by 572,000 short tons raw value from the previous month, while ongoing weather concerns threaten further reductions.

In the report, USDA slashed its forecast of 2019-20 beet sugar production by 9% and cane sugar outturn by 2.5%, resulting in a projected ending stocks-to-use ratio of 10.5%, down from 14.5% in October.

With a 10.5 percent ending stocks-to-use ratio forecast for FY20, USDA said it will will be addressing options in the “near future” in order to stabilize U.S. sugar supplies.

USDA intends to make an announcement between November 18 and December 10 as to quantity, type and source of additional sugar needed to ensure an adequate supply for the domestic market

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This is expected to avoid forfeitures and prevent or correct market disruptions.

Sugar production forecasts

According to the USDA forecasts, US sugar production in 2019-20 was placed at 8,612,000 tons, down 572,000 tons from October and down 382,000 tons from 2018-19.

Beet sugar production for 2019-20 was projected at 4,588,000 tons, down 466,485 tons, or 9%, from October due to poor harvest conditions resulting in lower sugar beet production.

“Beet processors reduced their sliced sugar beets projection by 10.3% to 28.442 million tons. The largest reductions are centered in the Red River Valley,” the USDA said in the report.

Cane sugar outturn was projected at 4,024,000 tons, down 105,803 tons, or 2.5% from October and down 0.8% from 2018-19 based lower sugar cane yields and recovery rates in Louisiana.

Total imports in 2019-20 were forecast at 3,159,000 tons, down 6,000 tons from October due to a like decrease in tariff rate quote (TRQ) imports at 1,621,000 tons.

Imports from Mexico were unchanged at 1,118,000 tons with high-tier imports also unchanged at 70,000 tons while total supply was forecast at 13,550,000 tons, down 524,000 tons from October and down 522,000 tons from 2018-19.

Ending stocks were placed at 1,285,000 tons, down 499,000 tons from October, with slight changes in domestic deliveries.

The USDA forecast domestic deliveries of sugar in 2019-20 at 12,230,000 tons, including deliveries for food at 12,125,000 tons, both down 25,000 tons from October, largely carrying forward a 19,000-ton reduction from 2018-19.

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