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  • The May WASDE projection expects a major shortfall in imports from Mexico and has not altered consumption estimates.
  • This means the USA need to import a further 400k tons this season to reach the targeted 13.5% stocks to use.
  • Early estimates for 2020/21 expect a rebound in domestic production but Mexican imports will depend on opening stock levels.  

May WASDE Release – 2019/20   

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  • The significant change in the WASDE report is a further reduction in expected exports from Mexico, down 150k short tons.
  • The early decline in Mexican production has prompted the USDA to reduce their import expectations to 1m short tons.
  • To date Mexico has exported 760k tons under their quota to the USA.
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Weekly Mexican Sugar Production

  • The USDA will need to once again increase imports further into the country to reach 13.5% closing stocks.
  • A further refined sugar TRQ quota as well as further raw TRQ quota expansion seems likely.
  • US Imports this season are already at record levels and the refined TRQ quotas have all been oversubscribed.
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  • If the US allows a further 400k tons to be imported duty free, imports into the country will make up 30% of total supply.
  • This is unless the USDA is expecting to reduce consumption at a later stage.
  • A 2% fall in consumption would reduce import needs by 250k tons.

2020/21 Projection  

  • The May Forecast is also the first look at expectations for 2020/21.
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  • The USDA expects a significant rebound in domestic production, particularly in the beet sector.
  • Whilst Mexico is currently allocated 1.6m tons, this will fall by 400k tons if closing stock targets are met.
  • Domestic production is going to be closely watched in the next 7 months.
  • The beet forecast could have been at 150k tons higher, but the plantings this season have been delayed.
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  • In certain northern states the spring has been cold and wet, preventing the beet going in the ground earlier.
  • A prolonged planting season means the beet needs to stay in the ground for longer, increasing weather risk.
  • Plantings in North Dakota is particularly behind.
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  • A dry summer and a mild autumn would mean the beet crop may rebound more than currently expected.
  • You can follow the planting rate here

Vincent O’Rourke

Vincent began his career at CZ in 2016 as an analyst in the London Office, focusing on raw sugar flows and the Refineries in North Africa and the Middle East. Since 2019 Vincent has moved to the Miami office, leading the Americas analysis (excluding Brazil) and implementing the new data capture and database processes. Vincent graduated from Edinburgh with a master’s in theology in 2015 and completed a Masters in Emerging Economies from King’s London University in 2016

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