Tighter U.S. Sugar Supply Forecast

WASHINGTON - Jul 11/08 - SNS -- Projected 2008-09 U.S. sugar supply is decreased 491,000 short tons, raw value, from last month, according to the latest supply and demand ourlooks from the USDA's World Agricultural Outlook Board.

Domestic production for 2008-09 is lowered 289,000 tons based on initial processor projections compiled by the Farm Service Agency. Total use is increased 175,000 tons, in line with the increased estimate for 2007-08. Ending stocks are projected to total 607,000 tons, down 666,000 tons from last month.

For 2007-08, lower sugar production, higher imports, and higher use combine to lower ending stocks 202,000 tons to 1.49 million. The increase in sugar use is based on the strong pace of deliveries during January to May 2008, and is supported in part by higher prices for corn-based sweeteners.

For Mexico, 2008-09 sugar production is projected at 5.85 million metric tons, raw value, about even with 2007-08. Along with lower beginning stocks and level imports, Mexico's 2008-09 supply of sugar totals 7.6 million tons, down 200,000 tons from the estimate for 2007-08. Mexico's total use of sugar is projected at 6.3 million tons, with exports mainly to the United States projected at 500,000 tons. Sugar stocks on October 1, 2009, are projected at 1.3 million tons.

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