Market Report: No End in Sight for High Sugar Prices

With the sugarcane crop harvest well underway in the gulf region, and sugar beet harvest nearing completion, those in the trade are eagerly anticipating how those domestic crop figures will pan out against USDA projections. In the meantime, sugar users who were hoping the USDA would take some measure to lower historically high sugar prices to tamp down inflation, will be disappointed.

Compared to FY 2021/22, our market is slightly more poised to handle possible shortfalls in domestic supply. As a reference, at this time last year, the US was anticipating 9,286,000 STRV of domestic production. This robust forecast mainly derived from record beet yield projections translating into an expected crop of 5,348,000 STRV. High tier imports were projected at 75,000 STRV and total demand at 12,305,000 STRV. As we learned halfway through the crop year, domestic production fell ~300,000 tons and an expected available supply of US bulk refined early in the calendar year, was subsequently replaced in the form of raw sugar portioned out later in the year.

Currently, the WASDE is projecting a more modest domestic supply of 9,154,000 STRV. With total sugar consumption also set at a relatively high estimate, the supply and demand ratio would suggest we need more imports versus last year. Nevertheless, buyers should not expect relief in prices as we find ourselves in the six-month window where total supply will be managed to a 13.5% stocks to use ratio until March when the relevant import quotas will be finalized.