Required Report - public distribution

**Date:** 4/5/2004

**GAIN Report Number:** NU4003

NU4003

**Nicaragua**

**Sugar**

**Nicaragua Sugar Annual**

**2004**

**Approved by:**

![](media/image1.wmf)Alan D. Hrapsky, Agricultural Counselor

U.S. Embassy

**Prepared by:**

Ervin F. Leiva, Agricultural Specialist

**Report Highlights:**

Nicaragua produced 4.4 million tons of sugar cane in the 2003/2004
harvest. The 2004/2005 forecast for sugar cane production is 4.4 million
tons. Nicaragua exported 119,020 MT of sugar in the 2002/2003 season.
Sugar exports are expected to reach 248,000 MT during the 2004/2005
season because of predicted stable weather conditions.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Managua \[NU1\]

\[NU\]

Table of Contents

[Executive Summary 3](#executive-summary)

[Table 1. Sugar Cane for Centrifugal Sugar: Supply and Utilization
3](#table-1.-sugar-cane-for-centrifugal-sugar-supply-and-utilization)

[Table 2. Centrifugal Sugar: Production, Supply and Demand
4](#table-2.-centrifugal-sugar-production-supply-and-demand)

[Production 4](#production)

[Crop Area 5](#crop-area)

[Yields 5](#yields)

[Consumption 5](#consumption)

[Trade 5](#trade)

[Table 3. Export Trade Matrix 6](#table-3.-export-trade-matrix)

[Policy 6](#policy)

[Marketing 6](#marketing)

# Executive Summary

Preliminary data indicates that Nicaragua produced 4,400,954 metric tons
(MT) of sugar cane during the 2003/2004 harvest. Major export
destinations included the US and Russia. The average sugar cane yield
was 83.0 MT per hectare (HA) in 2003/2004 versus 69.3 in 2002/2003.
Sugar production increased 31.7 percent in 2003/2004 to 453,000 MT.
Average national retail price for local processed sugar is \$20 per 100
lb.

## Table 1. Sugar Cane for Centrifugal Sugar: Supply and Utilization

+---------+-------------+-------+------+-------+-------+-------+-----+
| PSD     |             |       |      |       |       |       |     |
| Table   |             |       |      |       |       |       |     |
|         |             |       |      |       |       |       |     |
| ######  |             |       |      |       |       |       |     |
|  Countr |             |       |      |       |       |       |     |
| y {#cou |             |       |      |       |       |       |     |
| ntry-1} |             |       |      |       |       |       |     |
|         |             |       |      |       |       |       |     |
| Ni      |             |       |      |       |       |       |     |
| caragua |             |       |      |       |       |       |     |
+---------+-------------+-------+------+-------+-------+-------+-----+
| Co      | Sugar Cane  |       |      |       | (1000 |       |     |
| mmodity | for         |       |      |       | HA)   |       |     |
|         | Centrifugal |       |      |       | (1000 |       |     |
|         |             |       |      |       | MT)   |       |     |
+---------+-------------+-------+------+-------+-------+-------+-----+
|         | **2003**    | *     | **20 | **    | **2   | **    | *   |
|         |             | *Revi | 04** | Estim | 005** | Forec | *UO |
|         |             | sed** |      | ate** |       | ast** | M** |
+---------+-------------+-------+------+-------+-------+-------+-----+
|         | **USDA      | *     | **   | *     | *     | *     |     |
|         | Official    | *Post | USDA | *Post | *USDA | *Post |     |
|         | \[Old\]**   | Est   | Offi | Est   | Off   | Est   |     |
|         |             | imate | cial | imate | icial | imate |     |
|         |             | \[Ne  | \    | \[Ne  | \[Ol  | \[Ne  |     |
|         |             | w\]** | [Old | w\]** | d\]** | w\]** |     |
|         |             |       | \]** |       |       |       |     |
+---------+-------------+-------+------+-------+-------+-------+-----+
| *       |             | 10    |      | 10    |       | 10    | M   |
| *Market |             | /2002 |      | /2003 |       | /2004 | M/Y |
| Year    |             |       |      |       |       |       | YYY |
| Begin** |             |       |      |       |       |       |     |
+---------+-------------+-------+------+-------+-------+-------+-----+
| **Area  | 50          | 49    | 51   | 53    | 0     | 55    | (1  |
| Pl      |             |       |      |       |       |       | 000 |
| anted** |             |       |      |       |       |       | HA) |
+---------+-------------+-------+------+-------+-------+-------+-----+
| **Area  | 50          | 49    | 51   | 53    | 0     | 55    | (1  |
| Harv    |             |       |      |       |       |       | 000 |
| ested** |             |       |      |       |       |       | HA) |
+---------+-------------+-------+------+-------+-------+-------+-----+
| **Produ | 3515        | 3431  | 3642 | 4400  | 0     | 4400  | (1  |
| ction** |             |       |      |       |       |       | 000 |
|         |             |       |      |       |       |       | MT) |
+---------+-------------+-------+------+-------+-------+-------+-----+
| **TOTAL | 3515        | 3431  | 3642 | 4400  | 0     | 4400  | (1  |
| S       |             |       |      |       |       |       | 000 |
| UPPLY** |             |       |      |       |       |       | MT) |
+---------+-------------+-------+------+-------+-------+-------+-----+
| **Util  | 3515        | 3431  | 3642 | 4400  | 0     | 4400  | (1  |
| ization |             |       |      |       |       |       | 000 |
| for     |             |       |      |       |       |       | MT) |
| Sugar** |             |       |      |       |       |       |     |
+---------+-------------+-------+------+-------+-------+-------+-----+
| **Ut    | 0           | 0     | 0    | 0     | 0     | 0     | (1  |
| ilizatn |             |       |      |       |       |       | 000 |
| for     |             |       |      |       |       |       | MT) |
| Al      |             |       |      |       |       |       |     |
| cohol** |             |       |      |       |       |       |     |
+---------+-------------+-------+------+-------+-------+-------+-----+
| **TOTAL | 3515        | 3431  | 3642 | 4400  | 0     | 4400  | (1  |
| UTILIZ  |             |       |      |       |       |       | 000 |
| ATION** |             |       |      |       |       |       | MT) |
+---------+-------------+-------+------+-------+-------+-------+-----+

## Table 2. Centrifugal Sugar: Production, Supply and Demand

+----------+---------+-------+-------+-------+-------+-------+------+
| PSD      |         |       |       |       |       |       |      |
| Table    |         |       |       |       |       |       |      |
|          |         |       |       |       |       |       |      |
| Country  |         |       |       |       |       |       |      |
|          |         |       |       |       |       |       |      |
| N        |         |       |       |       |       |       |      |
| icaragua |         |       |       |       |       |       |      |
+----------+---------+-------+-------+-------+-------+-------+------+
| C        | Cent    |       |       |       | (1000 |       |      |
| ommodity | rifugal |       |       |       | MT)   |       |      |
|          | Sugar   |       |       |       |       |       |      |
+----------+---------+-------+-------+-------+-------+-------+------+
|          | *       | *     | **2   | **    | **2   | **    | **U  |
|          | *2003** | *Revi | 004** | Estim | 005** | Forec | OM** |
|          |         | sed** |       | ate** |       | ast** |      |
+----------+---------+-------+-------+-------+-------+-------+------+
|          | **USDA  | *     | *     | *     | *     | *     |      |
|          | O       | *Post | *USDA | *Post | *USDA | *Post |      |
|          | fficial | Est   | Off   | Est   | Off   | Est   |      |
|          | \[      | imate | icial | imate | icial | imate |      |
|          | Old\]** | \[Ne  | \[Ol  | \[Ne  | \[Ol  | \[Ne  |      |
|          |         | w\]** | d\]** | w\]** | d\]** | w\]** |      |
+----------+---------+-------+-------+-------+-------+-------+------+
| **Market |         | *     |       | *     |       | *     | **M  |
| Year     |         | *09/2 |       | *09/2 |       | *09/2 | M/YY |
| Begin**  |         | 002** |       | 003** |       | 004** | YY** |
+----------+---------+-------+-------+-------+-------+-------+------+
| **B      | 91      | 0     | 91    | 33    | 56    | 46    | (    |
| eginning |         |       |       |       |       |       | 1000 |
| Stocks** |         |       |       |       |       |       | MT)  |
+----------+---------+-------+-------+-------+-------+-------+------+
| **Beet   | 0       | 0     | 0     | 0     | 0     | 0     | (    |
| Sugar    |         |       |       |       |       |       | 1000 |
| Prod     |         |       |       |       |       |       | MT)  |
| uction** |         |       |       |       |       |       |      |
+----------+---------+-------+-------+-------+-------+-------+------+
| **Cane   | 364     | 344   | 375   | 453   | 0     | 453   | (    |
| Sugar    |         |       |       |       |       |       | 1000 |
| Prod     |         |       |       |       |       |       | MT)  |
| uction** |         |       |       |       |       |       |      |
+----------+---------+-------+-------+-------+-------+-------+------+
| **TOTAL  | 364     | 344   | 375   | 453   | 0     | 453   | (    |
| Sugar    |         |       |       |       |       |       | 1000 |
| Prod     |         |       |       |       |       |       | MT)  |
| uction** |         |       |       |       |       |       |      |
+----------+---------+-------+-------+-------+-------+-------+------+
| **Raw    | 0       | 0     | 0     | 0     | 0     | 0     | (    |
| I        |         |       |       |       |       |       | 1000 |
| mports** |         |       |       |       |       |       | MT)  |
+----------+---------+-------+-------+-------+-------+-------+------+
| *        | 0       | 0     | 0     | 0     | 0     | 0     | (    |
| *Refined |         |       |       |       |       |       | 1000 |
| Imp.(Raw |         |       |       |       |       |       | MT)  |
| Val)**   |         |       |       |       |       |       |      |
+----------+---------+-------+-------+-------+-------+-------+------+
| **TOTAL  | 0       | 0     | 0     | 0     | 0     | 0     | (    |
| I        |         |       |       |       |       |       | 1000 |
| mports** |         |       |       |       |       |       | MT)  |
+----------+---------+-------+-------+-------+-------+-------+------+
| **TOTAL  | 455     | 344   | 466   | 486   | 56    | 499   | (    |
| SUPPLY** |         |       |       |       |       |       | 1000 |
|          |         |       |       |       |       |       | MT)  |
+----------+---------+-------+-------+-------+-------+-------+------+
| **Raw    | 172     | 113   | 210   | 240   | 0     | 253   | (    |
| E        |         |       |       |       |       |       | 1000 |
| xports** |         |       |       |       |       |       | MT)  |
+----------+---------+-------+-------+-------+-------+-------+------+
| *        | 0       | 6     | 0     | 8     | 0     | 8     | (    |
| *Refined |         |       |       |       |       |       | 1000 |
| Exp.(Raw |         |       |       |       |       |       | MT)  |
| Val)**   |         |       |       |       |       |       |      |
+----------+---------+-------+-------+-------+-------+-------+------+
| **TOTAL  | 172     | 119   | 210   | 248   | 0     | 261   | (    |
| E        |         |       |       |       |       |       | 1000 |
| XPORTS** |         |       |       |       |       |       | MT)  |
+----------+---------+-------+-------+-------+-------+-------+------+
| **Human  | 192     | 192   | 200   | 192   | 0     | 192   | (    |
| Dom.     |         |       |       |       |       |       | 1000 |
| Consu    |         |       |       |       |       |       | MT)  |
| mption** |         |       |       |       |       |       |      |
+----------+---------+-------+-------+-------+-------+-------+------+
| **Other  | 0       | 0     | 0     |       | 0     | 0     | (    |
| Disappe  |         |       |       |       |       |       | 1000 |
| arance** |         |       |       |       |       |       | MT)  |
+----------+---------+-------+-------+-------+-------+-------+------+
| **Total  | 192     | 192   | 200   | 192   | 0     | 192   | (    |
| Disappe  |         |       |       |       |       |       | 1000 |
| arance** |         |       |       |       |       |       | MT)  |
+----------+---------+-------+-------+-------+-------+-------+------+
| **Ending | 91      | 33    | 56    | 46    | 0     | 46    | (    |
| Stocks** |         |       |       |       |       |       | 1000 |
|          |         |       |       |       |       |       | MT)  |
+----------+---------+-------+-------+-------+-------+-------+------+
| **TOTAL  | 455     | 344   | 466   | 486   | 0     | 499   | (    |
| DISTRI   |         |       |       |       |       |       | 1000 |
| BUTION** |         |       |       |       |       |       | MT)  |
+----------+---------+-------+-------+-------+-------+-------+------+

# Production

The Nicaraguan sugar cane harvest runs from November through May.
Preliminary data for the 2003/2004-crop year indicate total sugar cane
output of 4.4 million MT, 28 percent higher than the 2002/2003 yield of
3.4 million tons. The 2004/2005 forecast for sugar cane is 4.4 million
MT assuming stable weather conditions. The 2003/2004-crop was favored by
a good rainy season, establishing a production record.

## Crop Area

During the 2003/2004 season 53,006 HA of sugar cane were planted. This
shows an increase over the 2002/2003 season, which had 49,510 HA
planted. Area planted during the 2004/2005 season is estimated to
increase to 55,000 HA.

## Yields

According to the National Committee of Sugar Producers (NCPA), during
the 2003/2004 season the average sugar cane yield was 83.0 MT per HA,
which is higher than 2002/2003 season average yield of 69.3 MT per HA.
This increase in yield resulted from higher precipitation during the
2003/2004 season and improved sugar cane varieties. Planted area only
increased 7.0 percent from one season to the next one.

# Consumption

Total domestic consumption during the 2003/2004 season is estimated at
192,727 MT. The NCPA projects a 4 percent increase per year in domestic
consumption.

# Trade

Nicaragua's key exports destinations in 2003 included Russia and the US.
Nicaraguan exports totaled 119,020 MT of which 22,300 MT were exported
to the US.

The current US sugar quota for Nicaragua is 22,114 MT. During the CAFTA
negotiations Nicaragua gained access for an additional 22,000 MT of
sugar with a 2 percent annual increase. The CAFTA negotiations are
pending signature by each government for ratification.

Domestic market price for processed sugar is \$20 per 100 lb. A 55
percent import duty plus a 2 percent luxury tax for 2004 is charged on
sugar imports.

## Table 3. Export Trade Matrix

+----------------------------------+-----------------------+------+---+
| Export Trade Matrix              |                       |      |   |
|                                  |                       |      |   |
| Country                          |                       |      |   |
|                                  |                       |      |   |
| Nicaragua                        |                       |      |   |
+----------------------------------+-----------------------+------+---+
| Commodity                        | Centrifugal Sugar     |      |   |
+----------------------------------+-----------------------+------+---+
| Time Period                      | 2003                  | Un   | M |
|                                  |                       | its: | T |
+----------------------------------+-----------------------+------+---+
| **Exports for:**                 |                       |      | 1 |
+----------------------------------+-----------------------+------+---+
| **U.S.**                         | 22300                 | U.S. |   |
+----------------------------------+-----------------------+------+---+
| **Others**                       |                       | Ot   |   |
|                                  |                       | hers |   |
+----------------------------------+-----------------------+------+---+
| **Russia**                       | 96720                 |      |   |
+----------------------------------+-----------------------+------+---+
|                                  |                       |      |   |
+----------------------------------+-----------------------+------+---+
|                                  |                       |      |   |
+----------------------------------+-----------------------+------+---+
|                                  |                       |      |   |
+----------------------------------+-----------------------+------+---+
|                                  |                       |      |   |
+----------------------------------+-----------------------+------+---+
|                                  |                       |      |   |
+----------------------------------+-----------------------+------+---+
|                                  |                       |      |   |
+----------------------------------+-----------------------+------+---+
|                                  |                       |      |   |
+----------------------------------+-----------------------+------+---+
|                                  |                       |      |   |
+----------------------------------+-----------------------+------+---+
|                                  |                       |      |   |
+----------------------------------+-----------------------+------+---+
| Total for Others                 | 96720                 |      | 0 |
+----------------------------------+-----------------------+------+---+
| Others not Listed                |                       |      |   |
+----------------------------------+-----------------------+------+---+
| **Grand Total**                  | 119020                |      | 0 |
+----------------------------------+-----------------------+------+---+

# Policy

The GON does not set sugar prices, nor does it provide subsidies or
special credit programs.

# Marketing

The private sector buys and sells all sugar. Twenty percent of national
consumption is fortified with vitamin A and packaged in bags of 0.4 and
5 kg.