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Insight Focus
- High availability of beet has counteracted supply issues caused by poor weather conditions.
- The price pressure continues as raw sugar futures weigh on cane.
- Exports of US sugar to Mexico continue as the USDA downgraded production forecasts.
Beet Availability Counteracts Supply Concerns
Bulk refined sugar prices were steady to lower in the week ended January 12 amid slow deliveries and readily available new-crop beet sugar that offset concerns about slow imports from Mexico, where drought is taking a toll on the sugar cane crop for a second year.
Most beet processors indicated a slow pace in deliveries, mainly of bulk sugar, with 50lb bags and small retail bags holding near expectations. The next test for bulk sugar demand will come in late February to early March as manufacturers gear up for Easter candy production.
A combination of slow deliveries and strong production pressured bulk beet sugar prices, with values lowered by 1¢/lb to 2¢/lb across the Midwest and on the West Coast. Prices in part depended on quantity, with smaller buyers paying the top end of the range, but larger users at the bottom. Bulk beet sugar for 2024 mostly was offered at 55¢/lb to 58¢/lb FOB Midwest with some sales at 59¢/lb.
Beet sugar sales for 2024-25 were occurring at a slow pace. Midwest beet sugar prices appeared to be mostly in the low-50¢/lb area — unchanged.
Raw Sugar Futures Weigh on Cane
Bulk refined cane sugar for 2024 was offered at 62¢/lb FOB Northeast and West Coast, unchanged. Prices in the Southeast and Gulf at 58¢/lb to 60¢/lb FOB were steady to 1¢/lb lower. Also working against refined cane sugar prices was recent weakness in raw sugar futures.
Most processors reported strong sugar production due to good quality beets and smooth-running factories. One processor indicated it likely would have spot sugar to sell for the rest of the marketing year.
Concern about outside beet piles eased as cold weather was moving across much of the country’s midsection, including the Upper Midwest and Michigan, after an unseasonably warm December.
Mexico Continues to Combat Production Issues
Ample beet sugar supplies and drought-reduced production in Louisiana and Mexico have disrupted typical sugar flows. Imports from Mexico have been minimal, with the void filled by US cane and beet sugar and in some cases by imports from other countries. At the same time, traders indicated exports of US sugar to Mexico were ongoing.
The US Department of Agriculture in its January 12 World Agricultural Supply and Demand report forecast Mexico’s 2023-24 sugar production at just over 5 million tonnes, actual weight, down 5% from December and the lowest since 2009-10. US imports of sugar from Mexico were lowered, while exports of US sugar to Mexico were raised.
Source: WASDE
The USDA forecast US 2023-24 sugar ending stocks at 1.75 million short tons, raw value, up 8% from December as record-high US sugar production and high-duty imports more than offset the drop in imports from Mexico. The ending stocks-to-use ratio was raised to 13.7% from 12.8% in December.
Corn sweetener contracting for 2024 was complete. Most contracted prices were rolled over from 2023, but steady to lower values were noted from at least one corn refiner for dextrose and 42% high-fructose corn syrup.
