SUGAR AND SWEETENER -- SUMMARY                                May 21, 1998
May 1998, SSS-223
               Approved by the World Agricultural Outlook Board
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This SUMMARY is published by the Economic Research Service, U.S. Department 
of Agriculture, Washington, DC 20036-5831.  The complete text of the report 
will be available 1-2 weeks following this summary release.
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Beet Acreage Expands As New Processing Capacity Is Set To Come On Line

U.S. beet sugar production for 1997/98 is estimated at 4.225 million short 
tons, raw value (STRV). Production in the Red River Valley region is 
expected to continue through May as beets stored from last fall's harvest 
are processed.  California's production started in early April. Problems 
with excessive rainfall associated with El Nio caused delays in northern 
California producing regions. 

U.S. cane sugar production for 1997/98 is currently estimated at 3.630 million
STRV. Production is complete for Texas and Louisiana. Production in Florida
continued into the first half of April and is now estimated at 1.925 million
STRV. Hawaii is projected to produce 340,000 STRV. The estimate for Puerto 
Rico stands at 20,000 STRV.

Deliveries are now estimated at 9.9 million STRV. Growth in industrial uses,
especially in the baking/cereal and multiple-use categories, are particularly
strong. Exports under the re-export program remain estimated at 185,000 STRV,
implying a total use estimate of 10.085 million. 

Beet area planted for 1998 has risen 2.6 percent over 1997 to 1.497 million
acres. The largest increase (105 percent) is for Washington State, where the 
new Moses Lake processing factory is set to open this year. Beet acreage 
harvested is forecast at 1.463 million acres, and yield is expected to be 
20.3 tons per acre, implying a beet crop of 29.584 million tons. The recovery 
rate is projected at 14.65 percent, which reflects trend growth and additional 
sugar recovery from the desugaring of molasses. Therefore, the 1998/99 beet 
sugar forecast is 4.350 million STRV. 

Cane acreage for sugar in Florida is expected to be 422,000 acres in 1998. On
the basis of the excellent growing conditions witnessed thus far, the forecast
yield estimate--36.0 tons per acre--is set above trend but is not expected to
exceed last year's high value. Florida's sugar recovery rate is expected to
decrease somewhat from last year's high to 12.24 percent, implying a raw sugar
1998/99 production forecast of 1.860 million STRV.

Cane acreage for sugar in Louisiana is expected to be about the same as last
year--380,000 acres. Recent yield trend is expected to continue; the forecast
is 29.25 tons per acre. The expected sugar recovery rate is forecast at 11.47
percent, roughly the average for the last few years. Therefore, 1998/99 raw
sugar production from a cane crop of 11.115 million tons is 1.275 million STRV,
an increase over this year's estimated total by 10,000.

Texas' 1998/99 production is expected to rebound from last year's 
disappointing, drought-plagued crop to 90,000 STRV. Hawaii should come up to
this year's estimate of 340,000 STRV, barring major disturbances, natural or 
otherwise.  Puerto Rico's production appears to have bottomed out in the 
20,000 to 22,000 STRV range. It is projected at 20,000 for the upcoming year.

In all, 1998/99 cane sugar production is forecast at 3.585 million STRV, only
slightly below this year's estimate of 3.630 million. Combined with the beet
sugar estimate, U.S. sugar production should equal 7.935 million STRV.
 
Imports for the re-export program in 1998/99 are estimated at 300,000 STRV:
150,000 each for the sugar re-export program and the products re-export 
program.  Imports for polyhydric alcohol  are estimated at 10,000 STRV, 
and high-tariff and miscellaneous imports are set at 5,000 STRV. Until more
information is available, imports of sugar syrup (tariff code item 
1702.90.4000) are still estimated at 125,000 STRV. The tariff-rate quota 
for 1998/99 will be announced later this year but must be at least 1.256 
million STRV.

Deliveries for 1998/99 are forecast at 10.075 million STRV. The forecast 
implies an increase from this year's estimate by 1.76 percent. Delivery 
growth trends will continue to be favorable for baking and cereal, 
confectionery, and multiple uses.

U.S. raw sugar prices (nearby futures, C.I.F., duty-paid, Contract No. 14, 
New York) averaged 22.37 cents a pound in the first 6 market days of May, 
with a maximum and minimum price of 22.45 cents and 22.28 cents a pound, 
respectively.  The price averaged 22.14 cents in April compared with 21.79 
cents in the same month a year earlier.  Increasing U.S. sugar deliveries 
and the outlook for lower 1997/98 U.S. sugar carryover stocks have boosted 
nearby futures prices recently.  Wholesale refined beet sugar prices (F.O.B. 
plant, Midwest markets) have held at 25.50 cents a pound since December 1997 
compared with 28.00 cents in May 1997, reflecting the pressure of a larger 
1998 crop.  

The demand for HFCS-42, both in export and domestic markets, does not appear
particularly strong. Unless there are significant changes, demand, and hence
production, will pretty much resemble last year. Despite the trade dispute 
with Mexico, HFCS-55 production will likely grow in 1998. The current 
forecast is 5.1 percent, down from the 8 percent growth levels for 1996 and 
1997.

Printed copies of the Sugar and Sweetener Situation and Outlook report will 
be available in about a week. This issue contains two special articles "U.S. 
and World Sugar and HFCS Production Costs " and "Auctioning Tariff Quotas 
for U.S. Sugar Imports " For more information, contact Stephen Haley, 
202-694-5247. 

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