Approved by USDA’s World Agricultural Outlook Board Sugar and Sweeteners Outlook Michael McConnell, coordinator David Olson, contributor U.S. Sugar Supplies and Ending Stocks Tighten With Reduced Mexico Production Forecasts In the March World Agricultural Supply and Demand Estimates (WASDE), Mexico sugar production for 2019/20 is reduced substantially due to continued poor yields and recovery rates as it passes the halfway mark in the harvest season. With less production, Mexico’s exports are lowered, as well—particularly exports to the United States. U.S. sugar supplies for 2019/20 are also reduced, as less beet sugar production and lower imports from Mexico are only slightly offset by higher high-tier tariff imports. Projections for U.S. domestic deliveries and exports are unchanged, resulting in substantially lower ending stocks and a very tight market, by historical standards. 02,0004,0006,0008,00010,00012,00014,00016,0002006/072007/082008/092009/102010/112011/122012/132013/142014/152015/162016/172017/182018/19 (est.)2019/20 (proj.)1,000 STRVU.S. sugar supply, use, and ending stocks, 2006/07 to 2019/20Ending stocksTotal supplyTotal useSource: USDA, World Agricultural Outlook Board.Economic Research Service | Situation and Outlook Report Next release is April 15, 2020 SSS-M-379 |March 16, 2020 2 Sugar and Sweeteners Outlook, SSS-M-379, March 16, 2020 USDA, Economic Research Service Mexico Outlook Low Yields and Recovery Rates Lower Mexico Production Forecasts Unfavorable weather conditions have continued to impact Mexico’s sugarcane sector, reducing the outlook for sugar production from the 2019/20 crop. Drought conditions through the summer and fall of 2019 have resulted in lower yields. Additionally, rain throughout the peak harvest season has resulted in a slow pace of harvesting the crop and has negatively impacted recovery rates. The USDA projects Mexico sugar production at 5.200 million metric tons, actual value (MT) in the March World Agricultural Supply and Demand Estimates (WASDE), a 472,000-MT decrease from the previous month. The projection is based on Mexico’s harvesting about 780,000 hectares, which would be lower than the previous year’s record total but in line with recent historical averages. The Mexico sugarcane crop is often strongly influenced by how the latter portion of the harvest season performs. If dry weather conditions persist through May and early June, then additional area can be harvested and production boosted. The current USDA forecast would require that conditions, unlike in January and February, remain dry and allow the harvest to continue at a strong pace through the remainder of the year. sPmQtRxPvN6M8Q6MtRnNnPpPiNmMsRlOqRpQbRnMqPMYmMmNNZnMzR3 Sugar and Sweeteners Outlook, SSS-M-379, March 16, 2020 USDA, Economic Research Service Mexico’s sugarcane yields and mill recovery rates have remained much lower than historical levels. Throu...
