Sugar in Demand While HFCS Drops

WASHINGTON, D.C.USDA-ERS has released its Sugar and Sweeteners Outlook, which outlines a high U.S. sugar supply along with strong demand. Production of sugar beets is likewise rising. Although domestic demand for high-fructose corn syrup (HFCS) continues to decline, HFCS production is projected to be up for fiscal year (FY) 2010 with continued strong exportsparticularly to Mexico, which is importing HFCS at an all-time high. Forecasted high corn prices will likely drive up the price of HFCS.

The agency estimates that U.S. sugar supply for FY 2010 will increase 208,000 short tons, raw value (STRV), due to higher production and imports. Production is increased 98,000 STRV to account for larger-than-expected Aug. to Sept. output of U.S. beet sugar and an upward revision in expected Hawaii cane sugar production. Imports are increased 110,000 STRV, mainly due to higher imports from Mexico through the end of Sept. Total use is increased 115,000 tons to reflect strong end-user demand for imported refined sugar and minor increases in sugar exports and deliveries for re-export products. Deliveries for human consumption are estimated at 10.800 million STRV. Ending stocks, calculated as the difference between total supply and use, are at 1.063 million STRV, an increase of 93,000 STRV. The implied ending-year stocks-to-use ratio is 14.4%.

Projected U.S. sugar supply for FY 2011 is increased 63,000 STRV from supply in Sept. due to higher beginning stocks of 93,000 STRV more than offsetting lower expected cane sugar production of 30,000 STRV. Florida cane sugar production for FY 2011 is reduced 65,000 tons to match processor production projections of about 1.720 million STRV. FY 2010 cane sugar production in Hawaii is increased 35,000 STRV to match the FY 2010 estimate of 170,000 STRV. Deliveries for human consumption are increased 100,000 STRV to match the increase for FY 2010. The new deliveries projection is 10.875 million STRV. Ending stocks are projected at 1.047 million STRV, implying a stocks-to-use ratio of 9.3%.

Complete details on the state of the sugar market are available on the USDA-ERS website.