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Writer's pictureAvi Shaposhnik

As sugar prices hit historic highs, U.S. supply expands through increased imports

In the realm of the sugar market, significant shifts in supplies, production, and trade dynamics are poised to shape the trajectory for the upcoming periods. Both local and global factors intertwine, creating a dynamic landscape that calls for insightful analysis and strategic planning.

  • U.S. sugar supply rises by 148,289 short tons (STRV), influenced by increased imports and reduced beet sugar production. Ending stocks reach 2,013,900 STRV with a 15.84 percent ending stocks-to-use ratio. Re-export and Mexican supply availability contribute to import growth, alongside calendar year TRQ imports for FTA countries entering earlier than anticipated.

  • U.S. sugar supply for 2023/24 increases by 222,848 STRV due to higher beginning stocks, production, and imports. Sugar production forecasts see changes in sugarbeet and cane yields, with Louisiana and Texas facing challenges due to dryness affecting production. Import growth is driven by re-export and high-tier tariff refined imports.

  • Use for 2022/23 is reduced by 25,000 STRV due to a slowdown in human consumption deliveries. Beet deliveries lag behind last year, while cane deliveries partly compensate. U.S. sugar supply for 2023/24 is projected to end with 1,942,108 STRV in ending stocks and a 15.24 percent stocks-to-use ratio.

  • Mexico's sugar supply increases by 125,000 metric tons due to higher imports. Substantial drops in domestic sugar stocks drive prices to historic highs, encouraging elevated-tier tariff imports. Sugar exports to Mexico total 112,531 metric tons through May, with limited low polarity sugar production affecting total exports under license.

In the sugar market for 2022/23, Mexico's sugar supply rises by 125,000 metric tons (MT) to 6,388,512 MT due to increased imports. Decreased sugar stocks in May and June lead to historically high domestic prices, driving the influx of high-tier tariff imports. Mexico's sugar exports currently stand at 112,531 MT through May, constrained by relatively low production of low polarity sugar at 730,207 MT, limiting total exports. Meanwhile, U.S. sugar supply for 2022/23 grows by 148,289 short tons, raw value (STRV), driven by imports and partially offset by reduced beet sugar production. The resulting increase in stocks leads to an ending stocks-to-use ratio of 15.84 percent. Re-export and Mexico-origin imports rise, contributing to the supply boost, while adjustments are made to imports from FTA countries, high-tier tariff imports, and raw sugar TRQ shortfall due to updated analysis.


In terms of consumption, deliveries for human consumption in the U.S. have slowed, with domestic processors/refiners experiencing a 1-percent decrease year over year. Despite beet deliveries lagging behind the previous year by about 6.5 to 7.0 percent, there's potential for momentum to pick up in cane deliveries. Refined high-tier tariff imports are expected to increase, potentially offering an alternative to domestically processed products. Moving forward, the U.S. sugar supply for 2023/24 is projected to rise by 222,848 STRV due to increased beginning stocks, production, and imports. Sugar production projections adjust based on factors like sugar beet yield and dryness impact on cane sugar production. Import increases are influenced by re-export imports, FTA imports reallocation, and high-tier tariff refined imports. Ending stocks for 2023/24 are projected at 1,942,108 STRV, indicating a stocks-to-use ratio of 15.24 percent.


In summary, the current sugar market demonstrates significant supply and pricing changes for Mexico and the U.S. Given the evolving dynamics, implementing effective hedging strategies becomes essential to manage potential market fluctuations and ensure stability in this shifting landscape.


The information provided in this market insight is for general informational purposes and should not be considered as 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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