• The July WASDE indicated that the US Department of Agriculture expects oversupply in the 2019/20 season.
• However, this forecast relies on 1.3m tonnes of sugar coming from Mexico and almost all tariff rate quotas (TRQs) being filled in 2019/20.
• If this projection holds true, Mexico’s access will reduce to 1m tonnes in 2020/21.

July WASDE Release

• The WASDE projection for 2019/20 has increased the expected sugar imports from Mexico and under the TRQ program by 100k and 30k respectively.
• Whilst both figures would fit in the quotas allocated for the season, it will be impressive if these volumes materialise in September. 
• Mexico has exported 1.01m short tons of sugar to date, but the rate of exports has decreased over the last few months. 

• Mexico may continue to export around 100k tonnes a month, but this is unlikely, considering the crop has just finished.
• If Mexico only exports 200k tonnes in the next three months, US exports would fall right on the targeted 13.5% stocks-to-use ratio.
• However if Mexico manages to export 1.3m tonnes, their access will reduce in 2020/21.
• You can track Mexico’s crop progress using this Interactive Dashboard.

WASDE Projections for 2020/21

• Mexico’s quota allocation for 2020/21 will reduce if closing stocks are high this season.
• As it stands, Mexico will be given a total quota of 1m tonnes into the US.
• Of course, this is dependent on the domestic crop reaching the expected 9m tonnes (a 1m tonnes rebound year-on-year).
• Planting this season was slightly delayed by poor weather, but it finished only a little late in the end.

• The USDA plans to maximise TRQ imports next season; this suggests that they will reallocate any unused quotas.
• This will increase raw sugar availability in the country from TRQ quota holding countries that historically ship their quota.
• You can follow the US’ crop progress on Czapp using our USDA Interactive Dashboard.