NAFTA Sugar February 2012
The Comite Nacional Para El Desarrollo Sustentable de la Cana de Azucar (CNDSCA)
in Mexico recently published revised supply and use data for 2010/11 and the Secretariat of the Economy (Economia) released full marketing year data for sugar exports and imports. The U.S. Department of Agriculture (USDA) revised its Mexico supply and balance estimates as a consequence.
Based on an audit of all sugar mills, the CNDSCA estimates 2010/11 ending stocks at 687,363 metric tons (mt), a 9.5-percent reduction from the previous estimate. These 2010/11 ending stocks become the beginning stocks estimate for 2011/12. Economia reports 2010/11 sugar imports at 289,159 mt and 2010/11 sugar exports at 1,469,379 mt. Based on the new data, the USDA estimates total sugar deliveries for consumption, IMMEX re-export program, and miscellaneous at 4.415 million mt.
The USDA projects sugar production in Mexico for 2011/12 at 5.0 million mt, unchanged from last month. The USDA increased its projection of imports over last month by 34,000 mt to 344,000 mt. At this point in the forecasting cycle, USDA, basing its projection of Mexican sweetener consumption on the same per capita level as the previous year, projects it at 50.158 kilograms. The USDA did not change its estimate of 2011/12 HFCS consumption from 1.635 million mt, dry weight (up from 1.610 million last year). Total human consumption of sugar is therefore projected at 4.132 million mt. Historical optimal ending stock levels of 22 percent of sugar consumption are assumed for 2011/12, implying ending stocks of 909,000 mt. The USDA did not change its 2011/12 projection of sugar for IMMEX, projected at 283,000 mt.
Exports are forecast residually to balance total use with total supply. The projection this month is 707,000 mt, a decrease of 185,000 mt from last month. The implication for the United States is that imports from Mexico are reduced by 219,000 short tons, raw value (STRV) to 814,000 STRV for fiscal year (FY) 2012.
The USDA projects FY 2012 U.S. sugar production at 8.0 million STRV. This amount is comprised of 4.525 million STRV of beet sugar and 3.475 million STRV of cane sugar. The cane sugar projection is increased from last month by 130,000 STRV due to improved production prospects reported by cane sugar processors in Florida. The Foreign Agricultural Service (FAS) revised estimates of U.S. sugar imports for FY 2011 and projections for FY 2012 based on corrected data from the U.S. Customs Service. FAS also modified its forecast of imports under the Dominion Republic-Central American Free Trade Agreement (DR/CAFTA) and its forecast of imports occurring under the sugar re-export import program.
Taken together, reduced imports expected from Mexico are more than additional TRQ and re-export program imports - total expected FY 2012 imports are decreased by 44,000 STRV.
Based on pace-to-date, the USDA increased its forecast of sugar exports by 50,000 STRV to 250,000 STRV and its forecast of deliveries under the sugar-containing products re export program by 30,000 STRV to 180,000 STRV. Deliveries for human consumption were revised downward by 250,000 STRV to 10.975 million STRV. Ending stocks are projected as the difference between total supply and total use. The projection for FY 2012 is 876,860 STRV, implying an ending stocks-to-use ratio of 7.66 percent.