• The January WASDE note is forecasting a significant increase in beet sugar production in the current season.
• If these assumptions hold, the US crop would be the second largest domestic crop and the largest cane crop on record.
• This signals the March release is likely to reduce Mexican quota access to near 1m tonnes (down 100kmt)

January WASDE Release  

• The revision and increase in domestic production means supply will increase by 111k short tons in 20/21.
• As a result, the March WASDE release is likely to revise Mexican access to the US market down to restore stocks.
• The USDA is mandated in keeping ending stocks at 13.5% of annual consumption; they are currently forecast at 14.4%.
• Unless current assumptions change, Mexico will likely be the loser of this adjustment as per our Wasde Scenario Planner.

• As you can see, Mexican imports would need to reduce by 10% to bring closing stocks closer to 13.5%.
• This calculator allows users to change current WASDE assumptions and see their impact on the stock projections.
• It’s free to use and available to all on Czapp in our Interactive Data Section (USDA Dashboard).

Could Consumption Change Things?

• The USDA is currently forecasting a return to “normal” levels of consumption for 2020/21.
• This is after the 2019/20 pandemic led to an increase in domestic consumption across the country.
• It’s possible a further set of restrictive measures in the USA sees a rise in consumption again.

• Further restrictive policies, like those currently brought back into place in Europe, may see the US increase domestic consumption.
• This is because, whilst HFCS consumption has fallen, many sugary household goods saw a boost in demand.
• An introduction of these measures prior to the March WASDE release could see the USDA increase consumption and therefore maintain the Mexican quota as it is.