USDA ERS: Sugar and Sweeteners Outlook December 2018

Sugar and Sweeteners Outlook December 2018

U.S. Projected Production and Deliveries Reduced for 2018/19, Shipments from Mexico Raised

U.S. sugar production for 2018/19 is projected to be 8.941 million short tons, raw value (STRV) in the USDA’s December World Agricultural Supply and Demand Estimate (WASDE). Projected beet sugar production is reduced 74,000 STRV from the November report due to lower expected sucrose recovery from beet slicing during the year. Expected imports are raised 278,000 STRV due to increased entries from Mexico, based on the terms of the suspension agreement. Projected deliveries for 2018/19 are also reduced, by 50,000 STRV, based on industry reports of the pace of sales thus far for the year. Ending stocks are projected to total 1.664 million STRV, resulting in a stocks-to-use ratio of 13.5 percent.

The production outlook in Mexico is unchanged—with production projected to total 6.025 million metric tons, actual value (MT)—as the harvest season has just begun. Domestic deliveries are also unchanged, with per capita sugar deliveries expected to rebound from 2017/18, which saw a dramatic dip in deliveries alongside higher domestic prices. The December WASDE updated trade expectations for Mexico, however. Imports are reduced 45,000 MT from the previous level due to fewer shipments from the United States, which was a feature of the previous year’s market. Exports are raised 238,000 MT, reflecting the updated U.S. Needs calculation, according to the suspension agreement. Ending stocks are reduced from the previous month’s level, but the stocks-to-consumption ratio remains at 30.1 percent; relatively high by historical standards.

Michael McConnell, coordinator

DW Montgomery & Company has provided extensive market and contractual expertise within the sugar industry for over 60 years. Our family has now three generations working within the business and has grown to include a large variety of organic and natural ingredients. It is our pleasure to serve you and assist you in your purchasing needs.

All the best,

David Montgomery, Jr., Paul Montgomery, Andrew Montgomery, David Montgomery III, and Jody Payne