Sugar and Coffee Futures, Demand Expected to Jump.
USDA forecasts sugar production to be the highest since 2017 which was 9,293,000 tons. Global production is up 2.8 million tons to 183.2 million. Consumption is anticipated to rise to a new record due to growth in markets such as China, Indonesia, and Russia.
The USDA’s National Agricultural Statistics Service forecasts that Louisiana’s sugar production will increase by 5% to 15,818,000 tons this month. However, sugar beet production is expected to decrease by 2.65% to 32,574,000 tons due to lower harvested area and yield, but this decrease will be offset by an increase in sucrose recovery.
Forecasts for sugar imports are projecting a decrease of 35,480 tons to 3,458,000 tons. Tariff-rate quota imports are expected to decrease by 85,943 tons to 1,606,000 tons. Other program imports are forecast to remain unchanged at 250,000 tons. Imports from Mexico are forecast at 1,477,000 tons. High-tier imports are expected to increase by 50,000 tons to 125,000 tons.
Ending stocks are forecasted to increase by 1,885,000 tons, a 3.6% increase from 2021-22. The current-year ending stocks-to-use ratio is forecast at 14.9%, an increase from 13.5% in December and 14.3% in 2021-22.
Shortages from India, Turkey, Pakistan, and China will be offset by the increase in production from Thailand, EU, and Mexico.
Brazil’s Arabica output is expected to rebound by 3.4 million bags to 39.8 million. Furthermore, Colombia’s Arabica coffee production is forecast to increase by 800,000 bags to 12.6 million bags. Exports, to the United States and European Union, are expected to rise by 500,000 bags to 11.5 million bags due to increased supplies.
Additionally, the European Union forecasts a decrease in coffee imports by 2.1 million bags to 44.5 million. Top suppliers including Brazil (40 percent), Vietnam (20 percent), Uganda (8 percent) and Honduras (7 percent).
Furthermore, for the 2022/23 coffee production season, world production is expected to rebound by 6.6 million bags from the previous year to 172.8 million. Global consumption is also forecast to rise by 800,000 bags to 167.9 million, with the largest gains in the European Union, the United States, and Brazil.
In addition, recently Commitment of Traders report from the New York arabica coffee market shows Managed Money fund sector decreased their net short position by 10.86%. Meanwhile, the longer-term Index Fund sector of this market marginally decreased their net long position by 0.12%.