- The USDA has increased its US beet production estimate, even after the drought-hit summer.
- It’s also lifted its US’ TRQ (Tariff Rate Quota) expectations by more than 400k short tons, reducing Mexico’s access by the same amount.
- Mexico could therefore export onto the world market next season, provided the US’ beet crop doesn’t disappoint.
The September WASDE
- Friday’s WASDE saw the US Department of Agriculture (USDA) increase the TRQ (Tariff Rate Quota) for 2021/22 by more than 400k short tons.
- This is because this season’s delayed sugar imports, caused by late quota announcements and logistical disruption, could hit the US’ opening stocks next season.
- The USDA also decreased its Mexican import allowance; the US can now import 1.084m short tons of sugar from Mexico via the United States-Mexico-Canada Agreement (USMCA) in 2021/22.
- Mexico’s sugar supply should remain balanced with this allocation, as its crop outlook looks increasingly optimistic.
- · If its cane production estimate continues to rise, it may even export sugar onto the world market.
- · However, if the US beet crop underperforms, Mexico’s access could increase again, as the USDA strives to keep domestic prices stable.
How is the US Beet Crop Looking?
- Many thought the US beet crop would suffer following this summer’s drought.
- However, the USDA, having reduced its production estimate two months ago, now believes the US beet crop will perform fractionally better than it did in 2020/21 (5.06mmt vs. 5.08mmt).
- The US beet harvest is now underway, so we’ll keep an eye on early yield data.
- We suspect there’s scope for downward revisions across the next few months, however.
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