U.S. sugar production in 1999/2000 is
estimated at 8.1 million tons, an increase of 6 percent
over last year’s production. The increase in
production is due mainly to an increase in sugar produced
from sugarcane in Louisiana, where output is expected to
be up 25 percent from last year.
U.S. exports in 1999/00 are forecast at
159,000 tons, a decrease of 24 percent from year’s
level. U.S. exports are mainly refined sugar, with
Canada, Mexico, and Jamaica as the largest export
markets.
For Fiscal Year 2000, the U.S. Trade
Representative has allocated 1.14 million tons of raw
sugar imports under the raw sugar tariff rate quota
(TRQ). The FY 1999 TRQ ended at 1.16 million tons of raw
sugar imports. The 150,000 ton January, March, and May
tranches were canceled because the 1998/99 U.S.
stocks-to-use ratio forecast in those issues of the
USDA’s World Agricultural Supply and Demand
Estimates report was greater than 15.5 percent.
Canada
Canadian sugar production in 1999/2000 is
expected to increase by 6 percent to 138,000 tons. The
increase is due to an 18 percent increase in Alberta, the
main producing province.
With only minor production of domestic
beet sugar, Canadian demand is met primarily through
imports of raw sugar. Raw sugar is imported and then
processed into refined sugar. Total imports are forecast
to remain at 1.1 million tons in 1999/2000, the same as
the previous year. Refined sugar imports generally enter
under a duty drawback program with anti-dumping duties
refunded if the sugar is incorporated into products that
are subsequently re-exported. These imports are forecast
to continue at the same level.
Mexico
Mexico’s 1999/2000 sugar production
is expected to total 5.2 million tons, up slightly from
the May forecast, but 4 percent above the1998/99 revised
output. Weather for the current season has been favorable
for sugarcane development and sugarcane yields are
expected to be higher. Sugar outturn was revised downward
last year because of lower sugar mill yields and reduced
sugarcane production because of dry weather during the
growing season.
Exports in 1999/2000 are forecast at
900,000 tons, an increase of 80 percent from the previous
year’s revised forecast. The 1998/99 export estimate
was revised downward by more than 45 percent as the
industry did not meet its established goal due to the low
world prices. The Mexican sugar export forecast is highly
dependent on the production of sugar and the substitution
of alternative domestic and imported sweeteners. However,
compensatory duties on HFCS may reduce the level of
imports from the United States, lessening the amount of
import substitution.
Domestic consumption of sugar is expected
to remain flat in 1999/2000. Many factors have weakened
consumer purchasing power, and thus, domestic demand for
sugar in Mexico. The Mexican sugar industry maintains
that sugar consumption in Mexico is not growing in large
part due to substitution of alternative domestic and
imported sweeteners.
Caribbean/Central/South America
Cuba
Cuba’s 1999/2000 sugar production is
forecast at 4.1 million tons, up 8 percent from the
previous year’s estimate. Output has been increasing
significantly since the disastrous crop of 3.2 million
tons in 1997/98. However, July/December spring planting
of sugarcane fell far behind plan as heavy rains caused a
delay in seeding operations. This would impact the
2000/2001 crop as these seedlings require 18 months to
mature. Hurricane Irene was blamed for the excessive
rain, but caused very little damage to the 1999/2000
crop.
Cuban exports of sugar in 1999/2000 are
expected to decrease slightly to about 3.0 million tons,
due to increased competition in the world sugar market.
However, the export forecast for 1999/2000 was revised up
by 25 percent from the previous forecast, as higher than
expected production will lead to a larger exportable
surplus. The Cuban Sugar Ministry had set a goal of
boosting production to 6.0 million tons by 2001, but, low
levels of planting, slow germination, and financing
problems will make this goal difficult to reach.
Dominican Republic
Sugar production in the Dominican Republic
in 1999/2000 is estimated at 440,000 tons, up 11 percent
from the revised harvest of last season. The state owned
sugar mills will become privatized before the beginning
of 2000. It is expected that sugar production will begin
to show considerable growth after privatization, not only
with the mills involved, but also the installation of a
new private mill which will begin operations next year.
In 1999/2000, exports are forecast at
190,000 tons, which is 5 percent below the previous
forecast. The problems encountered in Dominican
production have necessitated the import of raw and
refined sugar for each of the past three years. Imports
in 1999/2000 and 1998/99 have been crucial in order for
the Dominican Republic to meet domestic consumption needs
and fulfill their part of the United States raw sugar
TRQ. The Dominican Republic is the largest supplier of
sugar to the United States under the TRQ, authorized to
export 185,346 tons in FY 2000. The United States also
represents the Dominican Republic’s largest export
market.
Guatemala
Sugar production in Guatemala is expected
to total 1.5 million tons, a 6 percent decrease from last
year, due to a 10 percent decline in planted area.
Exports of sugar from Guatemala are
forecast to fall in 1999/2000 to 1.02 million tons, due
to smaller exportable supplies. The export forecast in
1998/99 was reduced to 1.12 million tons, also due to the
reduced availability. Main non-U.S. export destinations
include Peru, Russia, Canada, Chile, and Mexico.
Guatemala’s initial allocation under the United
States raw sugar tariff rate quota for FY 2000 is set at
50,549 tons.
Brazil
Brazil’s sugar production in
1999/2000 is estimated at a record 19.2 million tons,
nearly the same as the May forecast, but up 5 percent
from the previous crop. The projected increase is due
mainly to high alcohol stocks, steady international
demand, and higher domestic sugar prices.
Brazil is forecast to export a record 9.7
million tons in 1999/2000, an increase of 10 percent from
the previous estimate. Additionally, the 1998/99 estimate
was raised by 6 percent as shipments were higher than
expected. The actual export level in the coming year will
depend on world raw sugar prices and the ability and
willingness of key trading partners to import more sugar.
Exports to markets in the Middle East and East Asia were
strong during the first part of the 1999/2000 marketing
year. The quantity of Russian imports will be important
in the 1999/2000 as higher prices and large stocks may
dampen Russian demand compared to the feverish 1998/99
pace. However, despite some industry concern, the
imposition of the season import tariff by Russia did not
entirely stop the importation of Brazilian sugar. The
level of Russian imports after November 30, when the
seasonal tariff is dropped, is expected to pick up and
will provide a key to Brazil’s overall 1999/2000
export outlook. Brazil’s main export destination is
Russia, but other key markets are the United States, the
United Arab Emirates, and Egypt.
In July, the Brazilian government
re-organized the domestic regulatory sector, transferring
both the Department of Sugar and Alcohol(DAA) and the
Alcohol Interministerial Committee to the Ministry of
Agriculture. The Brazilian Government continues to take
measures to support its alcohol program, which promotes
the consumption of both hydrated and anhydrous alcohol.
The Brazilian Government recently purchased more than 400
million liters of hydrated alcohol during May to August
of 1999, in order to create and maintain strategic and
operational stocks. Government purchases have been
carried out to relieve the market of excess alcohol
stocks, create a more stable market, and ensure
sufficient supplies for government enforced fuel mixing
programs.
Other important changes in the alcohol
industry have included the establishment of the
"Bolsa Brasileira de Alcool" and "Brazil
Alcool S.A.". Bolsa Brasileira de Alcool was created
in May of 1998 to focus on centralizing the fragmented
sales channels in the domestic alcohol market. Brazil
Alcool S.A. was an enterprise founded by alcohol
producers to manage the excessive domestic supply of
alcohol by maintaining strategic stock levels. The
company has stocked almost a billion liters of anhydrous
and hydrated alcohol to be sold on the international
market. The sales channel consolidation of Bolsa
Brasileira de Alcool and Brazil Alcool S.A. and
government purchases have helped to pull prices out of
the recent depression in the domestic and international
alcohol markets and have revitalized the sector.
European Union
Total sugar production in the European
Union in 1999/2000 is expected to total 18.7 million
tons, 2 percent above the May forecast and 5 percent more
than last year’s outturn. The increase is attributed
to nearly ideal weather during the growing season. Yield
increases in 13 of the 15 member states indicate a yield
increase of 7 percent. However, the 1999/2000 output will
fall short of the record 19.3 million tons produced in
1997/98.
Sugar in the European Union is produced
under a system of quotas. This policy is generally
designed to support internal prices to ensure producer
returns, maintain refining capacity, restrict imports to
specified trading partners, and subsidize exports of
domestically produced sugar. EU member states are
allocated an "A" and "B" production
quota, which is established until 2000/01. Any sugar that
is produced by any member of the EU that is in excess of
its yearly quota is considered "C-sugar." A and
B sugar production are used for domestic consumption and
as subsidized exports, while C-sugar must be exported
into the world market without a subsidy or carried over
into the next marketing year. Discussions are now
beginning on the formulation of the future sugar regime
in the EU. Though no revolutionary changes are expected
from internal reform, discussions of sugar in the WTO may
impact the EU sugar program in the future.
Exports from the EU in 1999/2000 are
forecast to increase 16 percent to 6.1 million tons.
Exports from the European Union are mostly in the form of
refined sugar. Additionally, due to the low world prices,
export subsidies provided for sugar exports have
increased significantly in the past 2 years. The largest
EU sugar markets are generally in the Middle East and
Northern Africa. The 5 largest markets in 1997/98 were
Algeria, Syria, Israel, Iran, and Russia. Imports in
1999/2000 are forecast at 1.9 million tons, slightly less
than 1998/99. Imports into the EU primarily consist of
about 1.3 million tons of preferential white sugar
imports, either duty-free or with a reduced duty. Almost
70 percent of the EU’s imports come from Mauritius,
Swaziland, Guyana, Jamaica, and Fiji.
Eastern Europe/Former Soviet Union
Poland
Poland’s sugar production in
1999/2000 is estimated at 1.8 million tons, down 7
percent from the May forecast and 19 percent less than
was produced last year. Dry weather in July and August
will result in reduced yields and a smaller crop for
processing.
Poland’s sugar export forecast for
1999/2000 was reduced by 15 percent to 277,000 tons due
to a smaller crop and the low international price for
sugar. This is down 30 percent from the 1998/99 export
level. One third of the 1999/2000 exports are expected to
be subsidized with WTO-allowed export subsidies. Most of
this sugar is shipped to Former Soviet Union countries,
mainly Uzbekistan, Russia, and Belarus, which now face
difficult economic problems. Exports of sugar-containing
foods are expected to continue to encounter difficulties
due to current market weakness in the Former Soviet Union
countries.
Russia
Sugar production in Russia is estimated at
1.45 million tons, up 32 percent from the May forecast
and last year’s outturn. The main reason for the
projected rise is the replanting of 90,000 hectares, due
to a May frost, resulting in a total planted area of
900,000 hectares compared to 820,000 hectares last year.
In addition, yields are up to 16.5 tons per hectare
compared to 13 tons per hectare in 1998. High quality
seed from Denmark in the spring of 1999 is cited as the
reason for increased yields.
Russia’s imports in 1999/2000 are
forecast at 3.7 million tons, a 30 percent decrease from
the previous year’s revised imports. Imports are
expected to be limited due to somewhat higher prices and
large carry over stocks from 1998/99. The imports for the
1998/99 season were raised 54 percent from the previous
forecast as record low world prices stimulated purchases.
Stocks have soared the past two years to about 2.6
million tons as the world price for raw sugar remains
very low and Russian production remains inadequate.
A seasonal tariff is in effect from August
1 until November 30 for raw sugar and January 31 for
white sugar. The seasonal tariff rate is 45 percent for
both raw and white sugar and will then drop back to 5
percent for raw and 30 percent for white sugar. In
response to the impending restrictions, Russian imports
in the early part of 1999 came in at a faster than
expected pace. Despite the seasonal tariff, some sugar
continued to flow into Russia from Brazil and other
suppliers. Raw sugar imports are expected to pick up
sharply as the tariff is reduced and refiners start to
demand more raw sugar inputs.
Ukraine
Sugar production in the Ukraine in
1999/2000 at 1.8 million tons is unchanged from the May
forecast, but down 10 percent from last year. Ukrainian
sugar producing areas suffered from freezing temperatures
in May which caused serious damage to emerging
sugarbeets. Although replanting occurred in some areas,
it was not sufficient to offset the damage caused by the
freeze.
The Ukrainian sugar beet industry
continues to be plagued by costly and inefficient
production processes and processing facilities. Despite
the fact that sugar beet production has not given
positive returns in the past two years, the Government of
Ukraine still advises farmers to maintain the present
acreage planted. Continuing debt problems are expected to
limit farmers’ access to herbicides, pesticides, and
adequate amounts of seed.
As a result of continued low production,
exports are forecast at a record low of 50,000 tons in
1999/2000. Ukraine exported 1.6 million tons in 1996/97,
but has not recovered after a series of poor crops.
Ukrainian imports are forecast to grow to about 400,000
tons. Imports are generally raw cane sugar, which is
refined in more than 70 factories. Most imports come from
Brazil, El Salvador, and Cuba, which have access to a
preferential tariff. Russia is traditionally the main
importer of Ukrainian sugar, but in 1999/2000 exports are
expected to be limited to government-to-government
agreements using sugar as repayment for resources
supplied by Russia and other Former Soviet Union
countries.
Africa/Asia/Middle East
India
India’s sugar production in 1999/2000
is estimated at a record 18.4 million tons, 3 percent
above the May forecast and 6 percent more than last
season. The expected increase is attributed to relatively
attractive cane prices and timely rains.
The government procures 40 percent of the
sugar produced by the mills as a levy, which is
distributed to consumers at subsidized rates through the
government-operated Public Distribution system. The mills
can then market the remaining amount of sugar in the open
market.
Imports of sugar are expected to fall
sharply from 1 million tons in 1998/99, to a forecast
200,000 tons in 1999/2000. The Government of India raised
the import duty on sugar three times between October 1998
and October 1999. The current duty equals 27.5 percent ad
valorem, plus a countervailing duty of rs. 850 per ton,
which is reportedly equivalent to the local taxes applied
on domestic sugar. The increased duties have squeezed the
margins on imports of sugar, despite the current low
international price. India’s imports come primarily
from Brazil, Thailand, and Pakistan. Exports in the past
two years are now mostly under preferential quota levels
to the European Union and the United States.
Pakistan
In Pakistan, sugar production in 1999/2000
is estimated at 3.2 million tons, 17 percent less than
the May projection and down 15 percent from the previous
season. The decline in projected output is due to a 10
percent reduction in area and lower yields because of low
monsoon rains in July and August.
In the 1999/2000 marketing year,
Pakistan’s exports of sugar are expected to be
limited to 200,000 tons. Many industry observers expected
Pakistan to have difficulty exporting sugar, given their
relatively high production costs and the high level of
competition in world markets. To promote sugar exports,
the Government of Pakistan provides an export subsidy of
approximately $90 per metric ton to help export stocks
that have accumulated over the past several years.
South Africa
South Africa’s 1999/2000 sugar
production is estimated at 2.7 million tons, up 4 percent
from the projection in May, but down 6 percent from the
1998/99 season. The decline from last year was due to
drought which stressed sugarcane.
South African exports have been revised
upward by 13 percent to 1.3 million tons. South
Africa’s main export destinations are South Korea,
Japan, and Russia. South Africa’s Department of
Trade and Industry, which oversees the sugar industry,
continues to support maintaining a tariff for imported
sugar and a single channel for export marketing. South
Africa recently notified the WTO of an export subsidy of
R 18.7 million for more than 26,000 tons of sugar. The
Government of South Africa claims that this subsidy is
producer financed, but detailed information on this
system is not yet available.
Thailand
Thailand is expected to produce a record
5.8 million tons of sugar in 1999/2000, 15 percent above
the May forecast and 7 percent above last year’s
revised output. The higher expectations are due to the
earlier onset of the 1999 monsoon rains, optimal rainfall
in the principle growing areas, and minimal pest and
disease presence in cane fields.
Sugar exports for the 1999/2000 season are
forecast at 3.4 million tons, an increase of 6 percent
due to the stronger production. The 1999/2000 export
forecast was revised upward by 13 percent from the last
report as a result of the higher than expected exportable
surplus. Japan, South Korea, and Malaysia are the major
buyers of Thai raw sugar. Indonesia is the major
purchaser of Thai white and refined sugar. The weak
international sugar market will also push Thailand to
increase stocks 35 percent to a record 1.6 million tons.
Turkey
In Turkey, sugar production in 1999/2000
is forecast at 2.0 million tons, down 19 percent from May
and 25 percent from last year. The decline is a
reflection of Government policy changes made in 1999 that
placed strict controls on production. Farmers will
receive the full support price only if they produce at
their assigned production tonnage.
Turkey’s exports are forecast to
remain at 400,000 tons for a second year. However, due to
the lower level of production, stocks are forecast to
decrease by about one half, to 430,000 tons. Turkish
export destinations primarily include Georgia,
Azerbaijan, and Syria.
Oceania
Australia
Sugar production in Australia for
1999/2000 is estimated at 5.4 million tons, 3 percent
more than the May projection and 10 percent more than the
previous season. Increased area and higher yields in
central and southern Queensland will more than offset
lower production in northern Queensland.
Australian sugar exports in 1999/2000 are
forecast to rise to 4.2 million tons, up 12 percent from
last year’s shipments. Korea became the top importer
of Australian sugar in 1997/98, with Japan, Malaysia, and
Canada as the other most important export destinations.
Due to the world oversupply problem that has resulted in
heavy export competition and low prices, Australian sugar
stocks are forecast to rise 47 percent to 545,000 tons in
1999/2000. Australian stocks have risen more than 200
percent in the past two years as a result of the
depressed world market.
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