NEW YORK: The United States’ sugar stocks-to-use ratio, a key indicator to evaluate supply and demand, jumped for the second consecutive month and reached 16.1% on Tuesday, according to an estimate by the US Department of Agriculture (USDA).

The USDA had increased its stocks-to-use projection from 13.5% to 14.4% in January, due to higher sugar production in the United States. It boosted its projection again on Tuesday as production numbers continue to rise. A higher ratio means reduced need of sugar imports to supply the market.

In its monthly global supply and demand report (WASDE), the USDA said the United States should produce 9.31 million short tonnes (ST) of sugar in the 2020/21 season, compared to 9.15 million ST seen in January and 8.14 million ST in the previous season.

It is the largest sugar production in the United States in five years, as production numbers from both beet and sugar cane processing facilities continued to increase. The projection for sugar use in the United States was unchanged from January at 12.34 million ST, which is nearly 200,000 ST less than seen in the previous season. The US government considers a stocks-to-use ratio of 13.5% as adequate for the balance of the market, so the current high ratio will likely drive the country to limit imports.

“After the publication of the sugar WASDE next month, the Commerce Department will determine a new export limit for sugar from Mexico,” the USDA said.