United States Department of Agriculture Electronic Outlook Report from the www.ers.usda.gov SSS-M-268 Dec. 14, 2010 Sugar and Sweeteners Outlook Stephen Haley, coordinator shaley@ers.usda.gov Mike McConnell mmcconnell@ers.usda.gov U.S. Sugar December 2010 Contents Summary Sugar in the NAFTA The Roundup Ready Sugar Beet Case World Production, Supply and Distribution Updated Forecasts Contacts and Links Websites WASDE Sugar Briefing Room -------------- The next release is January 18, 2011 -------------- Approved by the World Agricultural Outlook Board. Projected Mexico sugar production for the 2010/11 marketing year is increased 200,000 metric tons, raw value (MTRV) to 5.640 million MTRV, exceeding last year s production by over 500,000 MTRV. Based on an analysis of recently released production forecasts in Mexico, the U.S. Department of Agriculture (USDA) expects area to increase 3.6 percent over that of last year to 673,104 hectares and also expects sugar yields to increase by 5.6 percent to7.912 tons (actual weight) per hectare. Increased sugar supply is forecast to expand Mexico s exportable surplus on a one-to-one basis. Exports are forecast at 1.138 million MTRV. Most of these exports, if not all, are expected to enter the United States. Projected fiscal year (FY) 2011 U.S. sugar supply is increased 232,000 short tons, raw value (STRV) from that of last month, mostly due to the above-described increase in imports from Mexico, about 220,000 STRV. Cane sugar production in Florida is reduced 20,000 STRV to 1.700 million STRV because of lower projected sugar recovery from sugarcane. High-tier tariff imports are increased 30,000 MTRV to 40,000 STRV, reflecting the trend in volumes to date. Beginning stocks are increased 2,000 STRV due to revised ending stocks reported for FY 2010. Total use is unchanged. Deliveries for human consumption are forecast at 10.875 million STRV, about the same as last year. Analysis by the Sugar and Sweeteners Team of USDA s suggests that the U.S. market will continue to depend on refined sugar imports from Mexico and Central America to meet demand. Sugar in product imports for FY 2010 is estimated at 1.165 million tons. This amount is about equal to the average for the preceding 6 years.
Sugar in the NAFTA On December 10, 2010, the U.S. Department of Agriculture (USDA) released its latest sugar supply and use estimates for fiscal year (FY) 2010 and projections for FY 2011 in the World Agricultural Supply and Demand Estimates (WASDE) report. WASDE contained estimates and projections for both the United States and Mexico, members of the North American Free Trade Agreement (NAFTA). Mexico Sugar Production The USDA has increased its 2010/11 projection of sugar production in Mexico by 200,000 metric tons, raw value (MTRV) to 5.650 million MTRV. In November, the Comite Nacional Para el Desarrollo Sustentable de la Cana de Azucar (CNDSCA) in Mexico published factory-level forecasts of area, yield, sugarcane, and sugar. 1 The Sugar and Sweeteners Team at USDA s (ERS) aggregated the factory-level data and forecasts into regional groupings: Central, Gulf, Northeast, Northwest, Pacific, and South. 2 The team carefully examined CNDSCA sugarcane yield forecasts, comparing them with statistically based historical trends since the 1987/88 season. For five of the six producing areas, CNDSCA sugarcane yield forecasts were below historical trend. The ERS team adopted these forecasts and slightly decreased the yield forecast for the Central region (four factories in Morelos and Puebla). Based on statistical relationships between sugar yield (sugar produced per hectare) and sugarcane yields and trend, the ERS team derived forecasts of sugar yield for each of the regions. The team calculated sugarcane and sugar production levels based on CNDSCA area forecasts. Results are seen in table 1 for the regions and for Mexico as a whole. Also included are area, yield, and production estimates going back to 2004/05. Production levels in all regions, except the Pacific, are forecast to increase over last year s levels. The largest percentage increase is in the Northeast at over 40 percent, followed by the Northwest at over 30 percent, and the South at about 13 percent. The Gulf region, which includes most of the factories in the largest producing State of Veracruz, shows a 5-percent production increase. Nationally, production is forecast 10.4 percent higher than last year. National cane yield is forecast at 71.1 metric tons per hectare, above the average of 70.7 metric tons since 2004/05. Sugar yield is forecast at 7.91 metric tons per hectare, close to the average 7.95 metric tons per hectare for the previous 6 years. Unlike the last several years, this year s sugarcane harvest has progressed well through the early weeks. Through December 4, 2010, milled sugarcane has totaled 2.733 million metric tons and sugar produced has totaled 270,083 metric tons, tel quel. Sucrose recovery is calculated at 9.88 percent, a full percentage point above the average of the last six producing seasons. Strength in early-season recovery is usually a good indicator of continued good recovery in the remainder of the season. Implications for Mexican Sugar Use Although Mexican sugar is increased by 200,000 MTRV, consumption in Mexico is not expected to be much affected. High fructose corn syrup (HFCS), most of which is imported from the United States, is expected to gain sweetener market share, especially in the Mexican beverage industry. Even with higher expected U.S. corn prices this year, HFCS should easily retain its cost advantage over domestic sugar use in Mexico. Ending-year stocks are projected at 975,000 MTRV, the same as last month and 22 percent of the sugar forecast for domestic human use, 1 http://www.cndsca.gob.mx/ 2 See http://www.ers.usda.gov/briefing/sugar/sugarpdf/sss246mexico.pdf for background on the Mexican regional sugar groupings. 2
Table 1--Mexico sugarcane, area harvested, sugar, by region, 2005-2010, 2011 (projected), 12/14/10 Region Units 2005 2006 2007 2008 2009 2010 2011 (proj.) Central Cane harvested Tons 3,229,706 2,912,213 3,245,105 3,194,736 3,011,639 3,109,317 3,382,231 Area harvested Hectares 27,665 27,899 29,659 29,324 28,946 28,231 31,056 Sugar production Tons 393,861 358,899 399,244 402,583 379,756 386,309 424,821 Sucrose recovery Percent 12.19 12.32 12.30 12.60 12.61 12.42 12.56 Sucrose content Percent 15.04 15.07 15.15 15.26 15.35 NA NA Cane yield Tons/hectares 116.7434 104.3857 109.4138 108.9461 104.0422 110.1384 108.9075 Sugar yield Tons/hectares 14.2368 12.8644 13.4611 13.7288 13.1193 13.6839 13.6792 Gulf Cane harvested Tons 22,292,107 20,727,115 21,198,807 20,447,089 17,232,682 18,706,818 20,043,900 Area harvested Hectares 304,295 305,482 318,640 320,306 304,577 306,532 307,687 Sugar production Tons 2,498,047 2,297,516 2,269,533 2,261,688 1,998,756 2,011,392 2,116,240 Sucrose recovery Percent 11.21 11.08 10.71 11.06 11.60 10.75 10.56 Sucrose content Percent 13.42 13.25 12.90 13.48 13.77 NA NA Cane yield Tons/hectares 73.2582 67.8505 66.5290 63.8361 56.5791 61.0273 65.1438 Sugar yield Tons/hectares 8.2093 7.5209 7.1226 7.0610 6.5624 6.5618 6.8779 Northeast Cane harvested Tons 9,542,032 8,282,055 7,532,287 8,915,731 7,707,869 6,422,780 8,438,795 Area harvested Hectares 127,991 126,482 121,914 125,489 128,997 122,284 134,070 Sugar production Tons 1,070,114 950,967 794,523 1,043,359 909,155 696,051 977,049 Sucrose recovery Percent 11.21 11.48 10.55 11.70 11.80 10.84 11.58 Sucrose content Percent 13.77 14.08 13.21 14.30 14.32 NA NA Cane yield Tons/hectares 74.5524 65.4799 61.7836 71.0479 59.7524 52.5235 62.9432 Sugar yield Tons/hectares 8.3609 7.5186 6.5171 8.3143 7.0479 5.6921 7.2876 Northwest Cane harvested Tons 1,257,460 1,882,054 2,488,029 2,140,474 1,774,361 1,286,830 1,279,420 Area harvested Hectares 22,688 20,928 24,156 24,910 21,527 17,852 15,146 Sugar production Tons 112,623 178,260 222,983 199,404 164,786 92,475 122,033 Sucrose recovery Percent 8.96 9.47 8.96 9.32 9.29 7.19 9.54 Sucrose content Percent 11.06 11.56 11.05 11.39 11.46 NA NA Cane yield Tons/hectares 55.4240 89.9291 102.9984 85.9283 82.4261 72.0828 84.4725 Sugar yield Tons/hectares 4.9640 8.5177 9.2310 8.0050 7.6550 5.1801 8.0571 Pacific Cane harvested Tons 10,232,129 9,163,852 10,053,313 9,628,431 8,887,714 9,892,451 9,946,308 Area harvested Hectares 113,635 117,895 119,572 119,248 115,718 113,265 118,377 Sugar production Tons 1,237,508 1,030,471 1,166,484 1,170,887 1,064,392 1,168,908 1,152,980 Sucrose recovery Percent 12.09 11.24 11.60 12.16 11.98 11.82 11.59 Sucrose content Percent 14.31 13.68 13.90 14.42 14.18 NA NA Cane yield Tons/hectares 90.0438 77.7291 84.0775 80.7429 76.8052 87.3390 84.0223 Sugar yield Tons/hectares 10.8902 8.7406 9.7555 9.8189 9.1982 10.3201 9.7399 South Cane harvested Tons 4,339,209 4,323,119 4,507,583 4,079,012 3,912,573 4,284,351 4,766,147 Area harvested Hectares 60,141 60,343 60,753 63,728 62,935 61,568 66,768 Sugar production Tons 473,021 465,975 461,317 446,768 445,974 470,404 532,515 Sucrose recovery Percent 10.90 10.78 10.23 10.95 11.40 10.98 11.17 Sucrose content Percent 13.08 13.00 12.54 13.12 13.68 NA NA Cane yield Tons/hectares 72.1506 71.6430 74.1952 64.0066 62.1683 69.5873 71.3837 Sugar yield Tons/hectares 7.8652 7.7222 7.5933 7.0105 7.0862 7.6404 7.9756 Mexico Cane harvested Tons 50,892,643 47,290,409 49,025,124 48,405,473 42,526,838 43,702,547 47,856,802 Area harvested Hectares 656,415 659,029 674,694 683,005 662,700 649,732 673,104 Sugar production Tons 5,785,174 5,282,088 5,314,084 5,524,689 4,962,818 4,825,539 5,325,638 Sugar production Tons, raw value 6,132,284 5,599,013 5,632,929 5,856,170 5,260,587 5,115,071 5,645,176 Sucrose recovery Percent 11.37 11.17 10.84 11.41 11.67 11.04 11.13 Sucrose content Percent 13.68 13.50 13.18 13.81 13.97 NA NA Cane yield Tons/hectares 77.5312 71.7578 72.6628 70.8713 64.1721 67.2624 71.0987 Sugar yield Tons/hectares 8.8133 8.0150 7.8763 8.0888 7.4888 7.4270 7.9121 Sources: La Camara Nacional de las Industrias Azucarera Y Alcholera; USDA,, Sugar and Sweeteners Team. 3
which is the level considered to be optimal to carry over to the start of next harvest season. For these reasons, all of the Mexican production gain is expected to be exported to the U.S. market, where market tightness is expected to keep prices at attractive levels for Mexican exports. Exports are, therefore, projected 1.138 million MTRV. This level is about 55 percent higher than in 2009/10, but 17 percent below the record level of 1.367 million MTRV in 2008/09. U.S. Sugar Trade The USDA made certain changes to import estimates for FY 2010 (table 2) and projected imports for FY 2011 (table 3). The changes for FY 2010 were minor. Re-export imports were increased about 2,000 STRV to 450,252 STRV. Soon after the release of last month s WASDE, the U.S. Census Bureau released trade data for September, showing high-tier sugar imports at just short of 18,000 STRV. For the year, high-tier imports totaled 207,381 STRV, historically a very high level. For FY 2011, imports from Mexico were increased by 220,000 STRV to 1.245 million STRV, in accordance with the above discussion regarding Mexico s sugar exports. High-tier imports were increased 30,000 STRV to 40,000 STRV. The Foreign Agricultural Service (FAS) projects that high-tier imports through November have already totaled about 10,000 STRV. Although recent margins between the world raw sugar price (No.11 Intercontinental Exchange (ICE) nearby futures contract) and the U.S. raw sugar price (No. 16 ICE nearby futures contract) have made high-tier tariff raw imports unlikely, U.S. refined prices (57 cents per pound, Midwest, from Milling and Baking News) are a likely draw for refined sugar imports for much of the coming year. ERS Sugar Deliveries Model Sugar deliveries for FY 2011 are projected at 10.875 million STRV, a level slightly less (-0.4 percent) than corresponding deliveries estimated in FY 2010 (10.917 million STRV). Although sugar deliveries projections are decided upon by members of USDA s Interagency Commodity Estimates Committee (ICEC), results from various forecasting approaches are usually discussed as part of the projections-making process. One such approach has been developed by ERS s Sugar and Sweeteners Team and is discussed in this section. The ERS model is based on econometrically estimated relationships between sources of domestic sugar deliveries for human consumption beet processors, cane refiners/processors, and total deliveries (includes directconsumption imports) and long-term trends, observable short-term deviations from trend, and seasonal factors. One finding incorporated into the approach is the sensitivity of cane refiners/processors deliveries to beet processors deliveries. Monthly deliveries, mostly from USDA s Sweetener Market Data (SMD), since October 1998 form the period over which relationships are estimated. 3 A good deal of the variation in monthly deliveries can be accounted for: 85 percent for total deliveries, 86 percent for beet processors deliveries, and 76 percent for cane refiners/processors deliveries. Components of the model necessary for making projections are shown in table 4, which has two panels. The top panel shows parameters and parameter values for the three types of estimable deliveries. (Direct consumption imports, the fourth type of delivery, are not analyzed directly. Their projection levels in the bottom panel are calculated by subtracting projected beet and cane deliveries from the projected total.) The second column shows symbols corresponding to variables in the top panel. In that same column in the bottom panel, those symbols are 3 As many readers of the Sugar and Sweetener Outlook are aware, accounting for direct consumption imports has been difficult since the sweeteners provisions of the NAFTA came into full effect on January 1, 2008. Difficulties arose from sugar imported by traders and entities not required to report to SMD. It has been difficult, especially in FY 2008 and FY 2009, to tell whether this imported sugar was intended for further processing or not. Difficulties in distinguishing sugar end uses have led to significant differences within USDA about the level of total deliveries for human consumption. Starting in FY 2011, USDA s Farm Service Agency uses an approach close to that used by ERS. However, deliveries data for FY 2008, FY 2009, and FY 2010 have not yet been revised. The total deliveries data for these years used in the regression analysis are derived from the ERS approach. These data are available from the Sugar and Sweeteners Team and will be documented in a forthcoming ERS report. 4
Table 2--USDA estimate of sugar imports, FY 2010, 12/14/10 Item Metric tons, raw value Short tons, raw value Raw sugar TRQ 1,570,788 1,731,497 Less shortfall attributable to Mexico 1/ -7,258-8,001 Less other shortfall -85,296-94,022 Total raw sugar TRQ 1,478,234 1,629,474 Refined sugar TRQ Allocation to Canada 10,300 11,354 Allocation to Mexico 2,954 3,256 Less Mexican shortfall 1/ -2,954-3,256 Global 7,090 7,815 Specialty- Base 1,656 1,825 Additional 68,039 75,000 Total refined sugar TRQ 87,085 95,994 CAFTA/DR TRQ 116,927 128,889 Other- Singapore, Bahrain, Jordan 20 22 Peru 0 0 Total estimate TRQ entries 1,682,266 1,854,379 Mexico 732,164 807,073 Re-export program imports 408,462 450,252 Sugar syrups, high-tier 188,133 207,381 Total projected imports 3,011,025 3,319,085 TRQ=Tariff-rate quota; CAFTA/DR=Central American Free Trade Agreement/Dominican Republic. 1/ Total entries from Mexico, quota and nonquota, reflected below. Source: USDA, Foreign Agricultural Service. 5
Table 3--USDA estimate of sugar imports-fy 2011, 12/14/10 Item Metric tons, raw value Short tons, raw value Raw sugar TRQ 1,117,195 1,231,497 Less shortfall attributable to Mexico 1/ -7,258-8,001 Less other shortfall -44,452-49,000 Total raw sugar TRQ 1,065,485 1,174,496 Refined sugar TRQ Allocation to Canada 10,300 11,354 Allocation to Mexico 2,954 3,256 Less Mexican shortfall 1/ -2,954-3,256 Global 7,090 7,815 Specialty- Base 1,656 1,825 Additional 77,111 85,000 Total refined sugar TRQ 96,157 105,994 CAFTA/DR TRQ - calendar 2011 114,700 126,434 Other- Singapore, Bahrain, Jordan 54 60 Peru 2,000 2,205 Total estimate TRQ entries 1,278,396 1,409,188 Mexico 1,129,457 1,245,000 Re-export program imports 272,158 300,000 Sugar syrups, high-tier 36,288 40,000 Total projected imports 2,716,298 2,994,188 TRQ=Tariff-rate quota; CAFTA/DR=Central American Free Trade Agreement/Dominican Republic. 1/ Total entries from Mexico, quota and nonquota, reflected below. Source: USDA, Foreign Agricultural Service. 6
Table 4--ERS Sugar and Sweetener Team projection model of U.S. sugar deliveries for human consumption in fiscal year 2011, 12/14/10 Model coefficients Symbols Total deliveries (I) Beet deliveries (II) Cane deliveries (III) Direct cons. imports (IV) Constant A 798,231 406,252 561,144 Residual = I - (II+III) Shifter B -77,932 0 28,639 Trend (value in FY 2011) C 277,437 0 0 Beet deliveries D 0 0-0.2239 Oct E 0 0 0 Nov F -87,515-46,373-26,810 Dec G -185,116-86,485-90,187 Jan H -185,365-67,418-105,313 Feb I -195,505-69,566-106,805 Mar J -75,329-24,791-23,482 Apr K -131,868-41,520-62,573 May L -87,214-20,198-36,676 Jun M -47,886 0-16,804 Jul N -81,324-18,578-41,290 Aug O 0 0 0 Sept P 0 0 0 Model projections of monthly deliveries: total, beet sugar, cane sugar, and direct consumption imports (short tons, raw value Delivery months Formula Total deliveries (I) Beet deliveries (II) Cane deliveries (III) Direct cons. imports (IV) 1/ Oct SMD 2/ 981,833 425,823 488,114 67,896 Nov A+B+C+D*(II)+F 910,222 359,880 482,381 67,961 Dec A+B+C+D*(II)+G 812,621 319,767 427,987 64,867 Jan A+B+C+D*(II)+H 812,372 338,834 408,592 64,946 Feb A+B+C+D*(II)+I 802,232 336,686 407,581 57,965 Mar A+B+C+D*(II)+J 922,408 381,462 480,876 60,070 Apr A+B+C+D*(II)+K 865,869 364,732 445,532 55,606 May A+B+C+D*(II)+L 910,523 386,054 466,654 57,814 Jun A+B+C+D*(II)+M 949,850 406,252 482,003 61,595 Jul A+B+C+D*(II)+N 916,413 387,674 461,677 67,061 Aug A+B+C+D*(II)+O 997,737 406,252 498,807 92,678 Sept A+B+C+D*(II)+P 997,737 406,252 498,807 92,678 Total projected deliveries Sum 10,879,816 4,519,668 5,549,012 811,136 1/ Calculated as a residual; 2/ SMD=Sweetener Market Data from USDA's Farm Service Agency. Source: USDA,, Sugar and Sweeteners Team. 7
joined in formulas that show how top panel parameter values are joined to form monthly projections. Essentially, the values for the estimated constant (A), the shifter (B), and trend (C) are summed with the month parameter (E through P) to derive the corresponding month projection. Additionally, the resulting cane refiner/processor projection is reduced by about 22 percent of the same month beet deliveries to arrive at its final projection level. The bottom panel contains results. The values for October are values from the October 2010 SMD, and all other months are projections derived according to the described process. 4 Results here indicate that total FY 2011 deliveries are likely to be about 10.880 million STRV, given what is known and accounted for at the time of the estimation. Next month, a new estimation can be made when SMD publishes the November survey results. One notable result is that direct consumption imports are now an important part of meeting U.S. demand for sugar. Here they are projected to constitute about 7.5 percent of total sugar demand. Most of this sugar comes from Mexico and increasingly from Central America. 5 U.S. Sugar-Containing Product (SCP) Trade Table 5 shows estimates made by the Sugar and Sweeteners Team of sugar contained in product imports and exports on a fiscal year basis since FY 1995. Sugar contained in product imports has grown little since FY 2004 the levels in FY 2010 are fairly close to the average of the previous 6 years. The distribution of sugar-containing products across types has remained about the same; sugar confectionery is the largest source of product containing sugar, followed by cocoa and cocoa preparations. Figure 1 shows the distribution pattern for FY 2010 and the sourcing of the products among Mexico, Canada, and others. Mexico supplies a significant portion of sugar in sugar confectionery and cocoa products. Figures 2 and 3 focus on the development of Mexico s share of sugar in imported products over time. Although the annual volumes of sugar have been increasing since FY 1995, the rate of growth since FY 2007 (basically the period of full NAFTA implementation) has leveled off. 6 Figure 3 focuses on Mexico s increasing share, with roughly the same interpretation. Table 5 shows as well that U.S. exports of sugar in products have been increasing. The level in FY 2010 was about 735,000 tons, the highest level since FY 1995. Interestingly, the USDA estimates that only about 188,000 tons (or 201,238 STRV) came from USDA s sugar-containing product re-export program. 4 A more sophisticated version of this approach takes into account parameter variances from the estimation process and also covariances between all variables in the three equations. The results here are presented in terms of mean values and standard deviations. These can be used to report a range of statistically likely outcomes for each of the months for all types of deliveries. 5 USDA s Foreign Agricultural Service now publishes the refined-raw sugar split for U.S. sugar imports: http://www.fas.usda.gov/smi_arc.asp 6 Most of the sugar in Mexico s product exports to the United States come from Mexico s sugar-containing products re-export program, or IMMEX. A large proportion of the IMMEX sugar is imported from the United States under the U.S. refined sugar re-export program. With full implementation of the NAFTA, domestically produced sugar probably has a higher value being exported directly to the United States rather than being contained in exported products. 8
Table 5--Estimated sugar in U.S. product imports and exports, fiscal years 1995-2010, 12/14/10 Fiscal year Sugar Cocoa and cocoa Cereal and bakers Bread, pastry, Misc. edible Carbonated Total sugar Total sugar Net sugar confectionery preparations preparations cakes, etc. preparations soft drinks in imported in exported products products 1,000 short tons 1995 134,241 68,571 5,501 43,248 54,029 25,413 331,002 290,570 40,432 1996 141,627 69,334 7,807 47,101 66,464 31,007 363,339 351,219 12,120 1997 158,612 90,479 11,984 61,443 68,376 38,482 429,376 384,105 45,271 1998 181,737 99,282 18,627 70,896 84,716 39,532 494,790 374,931 119,859 1999 213,601 103,952 19,993 83,893 111,400 46,275 579,114 382,139 196,975 2000 233,569 128,841 20,006 96,742 122,082 56,554 657,794 425,769 232,025 2001 258,057 147,808 18,578 110,087 120,892 63,585 719,008 474,884 244,124 2002 283,689 188,916 19,210 118,626 141,362 69,539 821,341 452,898 368,443 2003 347,505 207,826 22,678 130,672 146,215 81,566 936,463 496,069 440,394 2004 395,265 215,342 25,706 138,282 178,896 92,542 1,046,032 537,711 508,321 2005 435,454 227,877 25,953 142,631 189,485 105,133 1,126,533 575,237 551,296 2006 504,686 264,992 25,085 145,661 192,231 124,242 1,256,896 577,597 679,298 2007 444,115 282,468 25,258 155,567 189,848 128,299 1,225,555 568,231 657,324 2008 420,612 273,642 25,356 154,979 192,495 123,365 1,190,449 667,220 523,229 2009 380,456 261,622 16,666 154,298 172,555 117,458 1,103,055 693,829 409,225 2010 401,390 275,267 16,399 171,476 178,849 121,484 1,164,866 735,076 429,790 Source: USDA,, Sugar and Sweeteners Team. Figure 1 Sugar in product imports, by type of product, and source country--mexico, Canada, rest-of-world (ROW)--FY 2010 1,000 short tons 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 Sugar Cocoa and confectionery cocoa prep. Cereal and bakers prep. Mexico Canada ROW Bread, pastry, cakes, etc. Misc. edible prep. Carbonated soft drinks Sources: U.S. Census Bureau; USDA,, Sugar and Sweeteners Team. 9
Figure 2 Sugar in imported products, accumulative by source country--mexico, Canada, rest-of-world (ROW)--FY 1995-2010 Metric tons 1,200,000 Mexico (flavored sugar) 1,000,000 ROW 800,000 600,000 400,000 200,000 0 Canada Mexico (excl flavored sugar) FY1995 FY1997 FY1999 FY2001 FY2003 FY2005 FY2007 FY2009 Sources: U.S. Census Bureau; USDA,, Sugar and Sweeteners Team. Figure 3 Sugar in imported products, proportion supplied by source country-- Mexico, Canada, rest-of-world (ROW)--FY 1995-2010 Metric tons 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Mexico (excl flavored sugar) Canada ROW Mexico (flavored sugar) Sources: U.S. Census Bureau; USDA,, Sugar and Sweeteners Team. 10
Table 6--U.S. sugar: Supply and use, by fiscal year 1/, 12/14/10 Items 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 1,000 short tons, raw value Beginning stocks 2/ 2,216 2,180 1,528 1,670 1,897 1,332 1,698 1,799 1,664 1,534 1,503 Total production 3/ 4/ 8,769 7,900 8,426 8,649 7,876 7,399 8,445 8,152 7,531 7,968 8,230 Beet sugar 4,680 3,915 4,462 4,692 4,611 4,444 5,008 4,721 4,214 4,575 4,800 Cane sugar 4,089 3,985 3,964 3,957 3,265 2,955 3,438 3,431 3,317 3,392 3,430 Florida 2,057 1,980 2,129 2,154 1,693 1,367 1,719 1,645 1,577 1,638 1,720 Louisiana 1,585 1,580 1,367 1,377 1,157 1,190 1,320 1,446 1,397 1,481 1,400 Texas 206 174 191 175 158 175 177 158 152 112 140 Hawaii 241 251 276 251 258 223 222 182 192 161 170 Puerto Rico 0 0 0 0 0 0 0 0 0 0 Total imports 1,590 1,535 1,730 1,750 2,100 3,443 2,080 2,620 3,082 3,319 2,994 Tariff-rate quota imports 5/ 1,277 1,158 1,210 1,226 1,408 2,588 1,624 1,354 1,370 1,854 1,409 Other program [mports 238 296 488 464 500 349 390 565 308 450 300 Nonprogram imports 76 81 32 60 192 506 66 701 1,404 1,014 1,285 Mexico 6/ 60 694 1,402 807 1,245 Total supply 12,575 11,615 11,684 12,070 11,873 12,174 12,223 12,571 12,277 12,821 12,727 Total exports 3/ 141 137 142 288 259 203 422 203 136 211 150 Quota-exempt for reexport 141 137 142 288 259 203 422 203 136 211 150 Other exports 0 0 0 0 0 0 CCC disposal, for export 0 0 0 0 0 0 Miscellaneous 123-24 161 23 94-67 -132 0 0-46 0 CCC disposal, for domestic nonfood use 10 0 0 0 0 0 0 0 0 0 0 Refining loss adjustment 0 0 0 0 0 0 0 0 0-46 0 Statistical adjustment 7/ 113-24 161 23 94-67 -132 0 0 0 0 Deliveries for domestic use 10,132 9,974 9,711 9,862 10,188 10,340 10,135 10,704 10,607 11,152 11,060 Transfer to sugar-cont. products for exports under re-export program 98 156 183 142 121 106 169 141 120 201 145 Transfer to polyhydric alcohol, feed 33 33 24 41 48 51 53 61 46 35 40 Deliveries for domestic food and beverage use 8/ 10,000 9,785 9,504 9,678 10,019 10,184 9,913 10,501 10,441 10,917 10,875 Total use 10,396 10,087 10,014 10,172 10,542 10,476 10,424 10,907 10,743 11,318 11,210 Ending stocks 2/ 2,180 1,528 1,670 1,897 1,332 1,698 1,799 1,664 1,534 1,503 1,517 Privately owned 1,395 1,316 CCC 784 212 Stocks-to-use ratio 20.97 15.15 16.68 18.65 12.63 16.21 17.25 15.26 14.28 13.28 13.53 CCC = Commodity Credit Corporation. Note: Numbers may not add due to rounding. 1/ Fiscal year beginning October 1. 2/ Stocks in hands of primary distributors and CCC. 3/ Historical data are from USDA Farm Service Agency ( FSA) (formerly Agricultural Stabilization and Conservation Service) for Sweetener Market Data (SMD) and USDA, National Agricultural Statistics prior to 1992. 4/ Prodcution reflects processors' projection compiled by FSA. 5/ Actual arrivals under the tariff-rate quota (TRQ) with late entries, early entries, and TRQ overfills assigned to the fiscal year in which they actually arrived.. The 2010/11 available TRQ assumes shortfall of 60,257 tons. 6/ Starting in 2007/08, total includes imports under Mexico's World Trade Organization TRQ allocation for raw and refined sugar. 7/ Calculated as a residual. Largely consists of invisible stocks change. 8/ For FY 2008-09, combines SMD deliveries for domestic human use, SMD miscellaneous uses, and the difference between SMD imports and World Agricultural Supply and Demand Estimates imports. Percent 11
Table 7--U.S. sugar: Supply and use (including Puerto Rico), by fiscal year, 1/ metric tonnes, 12/14/10 Items 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 1,000 metric tons, raw value Beginning stocks 2/ 2,010 1,977 1,386 1,515 1,721 1,208 1,540 1,632 1,510 1,392 1,364 Total production 3/ 4/ 7,955 7,167 7,644 7,846 7,145 6,712 7,662 7,396 6,832 7,228 7,466 Beet sugar 4,245 3,552 4,048 4,257 4,183 4,032 4,543 4,283 3,822 4,151 4,354 Cane sugar 3,710 3,615 3,596 3,590 2,962 2,681 3,119 3,113 3,009 3,078 3,112 Florida 1,866 1,796 1,932 1,954 1,536 1,240 1,559 1,492 1,431 1,486 1,560 Louisiana 1,438 1,433 1,240 1,249 1,049 1,079 1,198 1,312 1,267 1,344 1,270 Texas 187 158 173 159 143 159 161 143 138 101 127 Hawaii 219 227 251 228 234 202 201 165 174 146 154 Puerto Rico 0 0 0 0 0 0 0 0 0 0 0 Total imports 1,443 1,393 1,570 1,588 1,905 3,124 1,887 2,377 2,796 3,011 2,716 Tariff-rate quota imports 5/ 1,158 1,051 1,098 1,113 1,277 2,348 1,473 1,229 1,243 1,682 1,278 Other program imports 216 269 443 421 454 317 354 513 279 408 272 Nonprogram imports 69 73 29 54 174 459 60 636 1,274 920 1,166 Mexico 6/ 54 630 1,272 732 930 Total supply 11,408 10,537 10,599 10,950 10,771 11,044 11,088 11,404 11,138 11,632 11,317 Total exports 3/ 128 125 129 261 235 184 383 184 123 191 136 Quota-exempt for reexport 128 125 129 261 235 184 383 184 123 191 136 Other exports 0 0 0 0 0 0 0 0 0 0 0 CCC disposal, for export 0 0 0 0 0 0 0 0 0 0 0 Miscellaneous 112-22 146 20 85-61 -120 0 0-41 0 CCC disposal, for domestic nonfood use 9 0 0 0 0 0 0 0 0 0 0 Refining loss adjustment 0 0 0 0 0 0 0 0 0-41 0 Statistical adjustment 7/ 103-22 146 20 85-61 -120 0 0 0 0 Deliveries for domestic use 9,191 9,048 8,810 8,946 9,243 9,381 9,194 9,710 9,623 10,117 10,033 Transfer to sugar-cont. products for exports under re-export program 89 141 166 129 110 96 153 128 109 183 132 Transfer to polyhydric alcohol, feed 30 30 22 38 44 46 48 56 42 31 36 Deliveries for domestic food and beverage use 8/ 9,072 8,877 8,622 8,780 9,089 9,239 8,993 9,527 9,472 9,903 9,866 Total use 9,431 9,151 9,084 9,228 9,563 9,504 9,457 9,895 9,746 10,267 10,170 Ending stocks 2/ 1,977 1,386 1,515 1,721 1,208 1,540 1,632 1,510 1,392 1,364 1,376 Privately owned 1,266 1,194 CCC 711 192 Percent Stocks-to-use ratio 20.97 15.15 16.68 18.65 12.63 16.21 17.25 15.26 14.28 13.28 13.53 CCC = Commodity Credit Corporation. Note: Numbers may not add due to rounding. 1/ Fiscal year beginning October 1. 2/ Stocks in hands of primary distributors and CCC. 3/ Historical data are from USDA, Farm Service Agency (FSA), Agricultural Stabilization and Conservation Service (formerly ASCS) Sweetener Market Data (SMD) and USDA, National Agricultural Statistics Service, Sugar Market Statistics prior to 1992. 4/ Production reflects processors' projections compiled by the FSA. 5/ Actual arrivals under the tariff-rate quota (TRQ) with late entries, and TRQ overfills assigned to the fiscal year in which they actually arrive. The 2010/11 available TRQ assumes shortfall of 54,664 tonnes. 6/ Starting in 2007/08, total includes imports under Mexico's World Trade Organization TRQ allocation for raw and refined sugar. 7/ Calculated as a residual. Largely consists of invisible stocks change. 8/ For FY 2008-09, combines SMD deliveries for domestic and human use, SMD miscellaneous uses, and the difference between SMD imports and World Agricultural Supply and Demand Estimates imports. 12
Table 8--Mexico: Sugar production and supply and sugar and HFCS utilization, 12/14/10 Fiscal year (Oct/Sept) 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 1/ 1,000 metric tons Beginning stocks 1,063 1,548 1,172 1,194 1,237 1,965 1,294 1,718 1,975 624 973 Production 5,220 5,169 5,229 5,330 6,149 5,604 5,633 5,852 5,260 5,115 5,650 Imports 43 52 63 327 268 240 474 226 160 861 225 Supply 6,326 6,769 6,464 6,851 7,654 7,809 7,401 7,796 7,395 6,600 6,848 Disappearance: Human consumption 4,481 5,004 5,097 5,380 5,279 5,326 5,133 5,090 5,065 4,615 4,435 Other consumption 142 180 135 220 282 323 390 414 475 302 300 Miscellaneous -360-136 -27 Total 4,623 5,184 5,232 5,600 5,561 5,649 5,523 5,144 5,404 4,890 4,735 Exports 155 413 38 14 128 866 160 677 1,367 737 1,138 Total use 4,778 5,597 5,270 5,614 5,689 6,515 5,683 5,821 6,771 5,627 5,873 Ending stocks 1,548 1,172 1,194 1,237 1,965 1,294 1,718 1,975 624 973 975 Stocks-to-human cons. 34.5 23.4 23.4 23.0 37.2 24.3 33.5 38.8 12.3 21.1 22.0 Stocks-to-use 32.4 20.9 22.7 22.0 34.6 19.9 30.2 33.9 9.2 17.3 16.6 HFCS cons. (dry weight) 600 263 130 135 355 667 698 782 653 1,418 1,650 HFCS=High fructose corn syrup. 1/ Forecast. Sources: USDA, Foreign Agricultural Service, Production, Supply and Distribution online (historical data); USDA, World Agricultural Supply and Demand Estimates (forecast data). 13
The Roundup Ready Sugar Beet Case The most recent developments surrounding the use of Roundup Ready (RR) sugar beet seed for the domestic sugar beet crop have done nothing to quell the market s unease over beet sugar availability next fall. On August 13, 2010, a U.S. District Court determined that the U.S. Department of Agriculture (USDA) had unlawfully deregulated RR sugar beets in 2005 by violating the National Environmental Policy Act (NEPA). However, the court order exempted the 2010 RR sugar beet crop and the 2011 RR sugar beet seed supply. USDA granted permits to four seed companies to transplant stecklings (young beet plants) of RR beets, which are needed to produce the 2012 RR sugar beet seed supply. On September 28, 2010, the Center for Food Safety, the Organic Seed Alliance, the Sierra Club, and High Mowing Organic Seeds (plaintiffs) filed a motion in the U.S. District Court challenging USDA s permits, contending that issuing permits without an environmental review also violated NEPA. On November 30, 2010, the District Court of Northern California issued a preliminary injunction requiring the removal of RR sugar beet stecklings planted pursuant to permits issued by USDA. This order was to be effective December 7, 2010. However, on December 6, 2010, the 9th Circuit Court temporarily stayed the destruction order until December 23, 2010, giving the USDA and other defendants a short time to argue their case. The USDA and other defendants requested the stay, claiming that the district court erred in concluding that the plaintiffs had standing, that irreparable injury was likely, and that success by the plaintiffs was likely on the merits of the claim that USDA s Animal and Plant Health Inspection Service violated NEPA. In the meantime, the USDA is reviewing hundreds of public comments received in response to its Environmental Assessment (EA) published just over a month ago. The EA recommended the regulation of the commercial production of Roundup Ready sugar beets under special permits. USDA has indicated that a final decision will be made toward the end of the year or early January. The plaintiffs have stated their intention to file more suits if the USDA permits the commercial production of RR sugar beets in 2011. At this time, U.S sugar beet growers do not know which type of seed they will plant next spring or spring 2012. Whether enough conventional seed is available to completely plant the normal spring beet crop is unclear. The uncertainty surrounding the 2011 sugar beet crop has already affected the raw sugar futures markets and is contributing to the relatively negative outlook on 2011 sugar supply. 14
World Production, Supply and Distribution Updated Forecasts The U.S. Department of Agriculture s (USDA) November update of the Production, Supply and Distribution (PSD) online database lowered the world sugar production forecast for 2010/11 by 1.9 million metric tons from the May forecast to 162 million metric tons. The forecast for sugar production for human consumption was raised nearly 1.4 million metric tons to 158 million metric tons. Global ending stocks are expected to be 26.5 million metric tons, 564,000 metric tons lower than previously forecast. The update from USDA s Foreign Agricultural Service reflects changes from the May PSD forecast for 2010/11 as well as updates to the 2009/10 estimates. The most significant changes in production came from reductions in Brazil and China and forecasted increases in India. China is expected to produce 12.67 million metric tons of sugar in 2010/11, up from 11.5 million the previous year. Dry weather early in the year delayed planting and reduced planting area in some sugarcane-producing areas, which accounts for about 87 percent of sugar production. This reduction was partially offset by favorable weather later in the growing season, which is expected to raise yields. Overall, China s production for 2010/11 was lowered 1.35 million metric tons from May forecasts. Production in Brazil is expected to be 39.4 million metric tons for 2010/11, an 8-percent increase from last year. Dry weather in Brazil also reduced production by 1.3 million metric tons compared with May forecasts. Favorable weather in India aided yields and helped boost production. Indian production is forecast at 25.7 million metric tons in 2010/11, up from 20.5 million the previous year and 1 million metric tons higher than the May forecast. Lower production in Brazil will mean lower exports as well in 2010/11. The export forecast for Brazil was lowered 1.55 million metric tons to 26.85 million metric tons, which still represents an increase of more than 10 percent from the previous year s exports. Production estimates for Thailand, the world s second largest exporter, were also reduced for 2010/11, from 5.2 million to 4.7 million metric tons, because of lower production. International supplies will be further tightened by an estimated 500,000-metric-ton increase in imports for Pakistan, the result of lost production due to extreme flooding experienced there earlier in the year. After 2 years of dramatic decline, world ending stocks are expected to remain relatively flat, increasing from 26.1 million metric tons in 2009/10 to 26.5 million metric tons in 2010/11. India s stocks are expected to increase 36 percent from 4.7 million to 6.3 million metric tons. Better-than-expected production also resulted in an increase from the May forecast by nearly 1 million metric tons. After 2 years of poor production in 2008/09 and 2009/10, India was forced to reduce ending stocks by more than 60 percent and become a significant importer on the international market. Gradual improvement of India s stocks will be important for stabilizing world sugar prices. It will likely take several years and good growing conditions for India to replenish its stocks to its 2007/08 levels. Sugar consumption continues to grow globally. Over 158 million metric tons of sugar are forecast to be consumed in 2010/11, up nearly 3 percent from last year. Consumption in large developed regions, such as the European Union, Russia, and the United States, has remained relatively flat or increased to a smaller degree. However, consumption in countries like India, China, Indonesia, and Turkey has led to consistent growth in global sugar consumption. 15
Figure 4 World production, consumption, and inventories Production and consumption, 1,000 metric tons Ending stocks, 1000 metric tons 180,000 60,000 160,000 50,000 140,000 120,000 40,000 100,000 30,000 80,000 60,000 20,000 40,000 10,000 20,000 0 0 2000/2001 2002/2003 2004/2005 2006/2007 2008/2009 2010/2011 Ending stocks Total sugar production Human domestic consumption Source: USDA, Foreign Agricultural Service. 16
United States Department of Agriculture Today s Strategies & Tomorrow s Opportunities February 24-25, 2011 Crystal Gateway Marriott Hotel Arlington, Virginia To register, please go to: www.usda.gov/oce/forum Early Bird Registration $350 until January 21, 2011 $375 after January 21
Contacts and Links Contact Information Stephen Haley, (202) 694-5247, shaley@ers.usda.gov (coordinator) Mike McConnell (202) 694-5158, mmcconnell@ers.usda.gov (world sugar) Erik Dohlman (202) 694-5308, edohlman@ers.usda.gov (commodity analyst) Mae Dean Johnson (202) 694-5245, maedean@ers.usda.gov (web publishing) Subscription Information Subscribe to ERS e-mail notification service at http://www.ers.usda.gov/updates/ to receive timely notification of newsletter availability. Printed copies can be purchased from the USDA Order Desk by calling 1-800-363-2068 (specify the issue number). Data Tables from the Sugar and Sweeteners Yearbook are available in the Sugar and Sweeteners Briefing Room at http://www.ers.usda.gov/briefing/sugar/. They contain the latest data and historical information on the production, use, prices, imports, and exports of sugar and sweeteners. Related Websites Sugar and Sweeteners Outlook http://www.ers.usda.gov/publications/sss/ WASDE http://usda.mannlib.cornell.edu/mannusda/viewdocumentinfo.do?documented=1194 Sugar Briefing Room, http://www.ers.usda.gov/briefing/sugar/ E-mail Notification Readers of ERS outlook reports have two ways they can receive an e-mail notice about release of reports and associated data. Receive timely notification (soon after the report is posted on the web) via USDA s Economics, Statistics and Market Information System (which is housed at Cornell University s Mann Library). Go to http://usda.mannlib.cornell.edu/mannusda/aboutemailservice.do and follow the instructions to receive e-mail notices about ERS, Agricultural Marketing Service, National Agricultural Statistics Service, and World Agricultural Outlook Board products. Receive weekly notification (on Friday afternoon) via the ERS website. Go to http://www.ers.usda.gov/updates/ and follow the instructions to receive notices about ERS outlook reports, Amber Waves magazine, and other reports and data products on specific topics. ERS also offers RSS (really simple syndication) feeds for all ERS products. Go to http://www.ers.usda.gov/rss/ to get started. The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, age, disability, and, where applicable, sex, marital status, familial status, parental status, religion, sexual orientation, genetic information, political beliefs, reprisal, or because all or a part of an individual s income is derived from any public assistance program. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact USDA s TARGET Center at (202) 720-2600 (voice and TDD). To file a complaint of discrimination write to USDA, Director, Office of Civil Rights, 1400 Independence Avenue, S.W., Washington, D.C. 20250-9410 or call (800) 795-3272 (voice) or (202) 720-6382 (TDD). USDA is an equal opportunity provider and employer. 18