US sugar supply improves 2011/12

NEW YORK: The U.S. sugar supply situation in 2011/12 eased as imports from Mexico helped alleviate tight domestic supplies, the U.S. Agriculture Department said on Thursday.

USDA's monthly supply/demand report in June showed the closely watched stocks-to-use ratio in 2011/12 was projected at 9.2 percent, from the previous month's 7.7 percent. The figure is still below the 15 percent the USDA prefers.

The situation improved because of increased sugar imports from Mexico. USDA said the imports are projected to rise to 1.155 million short tons, from 980,000 short tons in last month's report.

U.S. sugar ending stocks are seen at 1.056 million short tons, from 885,000 short tons last month.

The stocks-to-use ratio is monitored closely by the USDA and the global sugar industry because it is used by Washington to determine if additional sugar imports are necessary.

USDA prefers the stocks-to-use ratio at 15 percent. A drop in the figure to near 5.0 percent has been cited by the government when it has decided to increase imports.

For 2011/12, USDA expects Mexico's output to remain steady at 5.65 million tonnes.

The U.S. annually consumes about 10 million short tons of sugar, and imports account for a quarter of the total. Together with Mexico, the two countries account for the biggest sweetener market in the world, according to trade sources.

Copyright Reuters, 2011