Required Report - public distribution

**Date:** 3/31/2006

**GAIN Report Number:** CS6001

CS6001

**Costa Rica**

**Sugar**

**Annual Report**

**2006**

**Approved by:**

![](media/image1.wmf)Katherine Nishiura, Agricultural Attache

FAS San Jose

**Prepared by:**

Victor Gonzalez, Agricultural Specialist

**Report Highlights:**

After a record production of 404,000 MT, Costa Rica\'s sugar production
is expected to decline to 380,000 MT in crop year 2005/2006. Production
is expected to increase to 390,000 MT in 2006/2007.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

San Jose \[CS1\]

\[CS\]

#  

[Executive Summary 3](#executive-summary)

[Production 3](#production)

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

[Table 2: Centrifugal Sugar: Production, Supply and Distribution
1](#table-2-centrifugal-sugar-production-supply-and-distribution)

[Area Planted 1](#area-planted)

[Yields 1](#yields)

[Consumption 1](#consumption)

[Prices 1](#prices)

[Trade 1](#trade)

[Table 3: Export Trade Matrix 2](#table-3-export-trade-matrix)

# 

# Executive Summary

Costa Rica's cane and sugar production are expected to decline in the
2005/2006 crop year to 3,595,590 MT and 380,000 MT respectively.
Preliminary data indicate that the cane production yield will decline
from 77.3 MT/ha in 2004/2005 to approximately 73 MT/ha. in 2005/2006.
Production in the 2005/2006 year was negatively affected by excess
moisture in the province of Guanacaste, where most of the sugar cane is
grown. The forecast for 2006/2007 is for slightly higher cane and sugar
production, assuming rainfall patterns are normal during the rainy
season.

# Production

Costa Rica's sugar cane production is concentrated in the pacific
region, mainly in the province of Guanacaste. After a 14.3% increase in
output during 2003/2004, sugar cane production declined 3.9% to
3,804,648 MT during crop year 2004/2005. Cane production is expected to
decline 5.5% during 2005/2006 as a result of a stronger than usual rainy
season in 2005, which negatively affected prodution areas in Guanacaste.
After a record production level of 410,000 MT of sugar in 2004/2005,
sugar production is expected to reach 380,000 MT in 2005/2006.

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

![](media/image2.wmf)

# Table 2: Centrifugal Sugar: Production, Supply and Distribution

  --------------- --------------- ----------------- ---------- ----------------- ---------- -----------------
  **PSD Table**                                                                             

  **Country**     **Costa Rica**                                                            

  **Commodity**   **Sugar,                                                       (1000 MT)  
                  Centrifugal**                                                             

                  2005            Revised           2006       Estimate          2007       Forecast

                  USDA Official   Post              USDA       Post              USDA       Post
                  \[Old\]         Estimate\[New\]   Official   Estimate\[New\]   Official   Estimate\[New\]
                                                    \[Old\]                      \[Old\]    

  **Market Year                   10/2004                      10/2005                      10/2006
  Begin**                                                                                   

  Beginning       63              63                73         76                78         77
  Stocks                                                                                    

  Beet Sugar      0               0                 0          0                 0          0
  Production                                                                                

  Cane Sugar      410             404               420        380               0          390
  Production                                                                                

  TOTAL Sugar     410             404               420        380               0          390
  Production                                                                                

  Raw Imports     0               0                 0          0                 0          0

  Refined         0               0                 0          0                 0          0
  Imp.(Raw Val)                                                                             

  TOTAL Imports   0               0                 0          0                 0          0

  TOTAL SUPPLY    473             467               493        456               78         467

  Raw Exports     190             183               200        145               0          180

  Refined         0               0                 0          0                 0          0
  Exp.(Raw Val)                                                                             

  TOTAL EXPORTS   190             183               200        145               0          180

  Human Dom.      210             208               215        234               0          220
  Consumption                                                                               

  Other           0               0                 0          0                 0          0
  Disappearance                                                                             

  Total           210             208               215        234               0          220
  Disappearance                                                                             

  Ending Stocks   73              76                78         77                0          67

  TOTAL           473             467               493        456               0          467
  DISTRIBUTION                                                                              
  --------------- --------------- ----------------- ---------- ----------------- ---------- -----------------

## Area Planted

Area planted has remained stable over the last few years and is expected
to grow slowly in the short term. It has recently been mentioned that
producers in some areas of the country are shifting from sugar to
pineapple production, but the net effect of newly planted areas, mostly
in Guanacaste, is expected to remain positive for sugar. Although higher
sugar prices may attract some new farmers to the activity, area planted
to sugarcane is not expected to increase sharply.

# Yields

Based on data provided by the Costa Rican Sugar League (LAICA), the
average sugar cane yield was 77.3 MT/ha. in 2004/2005. The cane yield is
expected to decline to 73 MT/ha. in 2005/2006. The average sugar yield
was 106.3 kg/ton in 2004/2005, up from 104.4 kg/ton in 2003/2004. The
average sugar yield is expected to decline slightly in 2005/2006,
resulting in lower sugar output.

# Consumption

Costa Rica's sugar consumption is estimated at 235,000 MT for crop year
2005/2006, up 13% from 2004/2005. Per capita sugar consumption was
roughly 56 kg. in 2005/2006. Costa Rica's per capita sugar consumption
is one of the highest in the region, although it has declined from a
record 59.2 kg in 1997-1998. Of total sugar consumption, about 53% is
used for direct consumption and 47% is for industrial use.

# Prices

Costa Rica protects its sugar market with high duties (45%). The
domestic price (higher than world sugar prices) as well as higher prices
obtained under quotas such as that allocated by the U.S., provide
support to producers and millers. The retail price for white sugar
ranges from \$0.31 to 0.35 per pound in the local market.

# Trade

Sugar exports are expected to reach 145,000 MT in 2005/2006, down from
183,000 MT in 2004/2005. Export volume may increase to 180,000 MT during
2006/2007 assuming that the production volume increases as expected. The
main destinations for Costa Rica's sugar are the U.S., including for
re-export, Canada under the Costa Rica-Canada free trade agreement and
the former Soviet Union. In 2004/2005, Costa Rica exported 23,457 MT of
sugar to the Mexican market under the FTA with that country. Although
Costa Rica is supposed to have preferential access to the Mexican market
under their FTA, during the past ten years it had not been able to
access that market.

# Table 3: Export Trade Matrix

  ---------------------- ------------------------------- -------- --------
  **Export Trade                                                  
  Matrix**                                                        

  **Country**            Costa Rica                               

  **Commodity**          Sugar, Centrifugal                       

  Time Period            2005                            Units:   MTRV

  Exports for:                                                    **1**

  U.S.                   47,938                          U.S.      

  Others                                                 Others   

  Canada                 61,551                                    

  Russia                 46,150                                    

  Mexico                 23,457                                    

                                                                   

                                                                   

                                                                   

                                                                   

                                                                   

                                                                   

                                                                   

  Total for Others       131,158                                  0

  Others not Listed      4,107                                     

  Grand Total            183,203                                  0
  ---------------------- ------------------------------- -------- --------