In the recent WASDA report published on March 8, 2024, by the USDA, significant trends and forecasts for the sugar market have been highlighted, focusing on both the U.S. and Mexico for the 2023/24 production year.
Mexico's sugar production for 2023/24 is projected at 4.747 million metric tons, a decrease of 127,518 MT from last month and 476,766 MT less than the previous year, with significant concerns over below-average yields and sucrose recovery rates.
U.S. sugar production for 2023/24 is reduced by 109,050 short tons (STRV), with beet sugar production down by 155,761 STRV and cane sugar production up by 46,711 STRV. The raw sugar Tariff-Rate Quota (TRQ) is increased by 137,789 STRV to offset reduced imports from Mexico.
Exports from Mexico to the United States are projected at 569,698 MT, making up 75 percent of Mexico's total sugar exports, which total 594,698 MT. U.S. ending stocks are projected at 1.701 million STRV, with an ending stocks-to-use ratio of 13.38 percent, down from 14.20 percent last month.
Mexico's sugar production for 2023/24 is forecasted at 4.747 million metric tons (MT), marking a decrease of 127,518 MT from the previous month and 476,766 MT less than the previous year. This decline is attributed to significantly below-average yields and sucrose recovery rates as of March 2, with no signs of imminent improvement. The expected national sugarcane yield is 61.9 MT/hectare, lower than last month's forecast, with sucrose recovery at a historical low of 9.97 percent. The report indicates that high fertilizer costs and drought in specific regions are adversely affecting sucrose recovery levels.
U.S. sugar production for 2023/24 has been revised downwards by 109,050 short tons, raw value (STRV), primarily due to a decrease in beet sugar production, which is only partially compensated by an increase in cane sugar production.
The USDA has increased the raw sugar Tariff-Rate Quota (TRQ) by 137,789 STRV, which is mostly offset by reduced imports from Mexico. Ending stocks are projected at 1.701 million STRV, leading to an ending stocks-to-use ratio of 13.38 percent, a decrease from 14.20 percent last month.
Mexico's exports to the United States are projected at 569,698 MT, accounting for 75 percent of its total sugar exports. The total exports are estimated at 594,698 MT, a reduction from last month. The U.S. sees a reduction in imports from Mexico but an increase in the TRQ to manage domestic supply needs.
The sugar market is experiencing a contraction in production both in Mexico and the U.S., primarily due to environmental challenges and market dynamics. Mexico's significant decrease in production year-over-year highlights the impact of adverse weather conditions and high input costs on sugarcane yields and sucrose recovery. In the U.S., adjustments in beet and cane sugar production reflect regional climate impacts and shifts in import policy to stabilize the market.
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The information provided in this market insight is for general informational purposes and should not be considered financial advice. It is not intended to offer any financial recommendations or endorsements. Any decisions made based on the content are the sole responsibility of the reader.
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