*** NOTE TO USERS (6/20, 11:30 a.m):  The Summary available after 3:00 p.m.
yesterday (6/19) was an old summary loaded in error.  This Summary is the
correct copy for June 1995.  ERS sincerely regrets the error and apologizes for
any inconvenience it caused.
 
SUGAR AND SWEETENERS--SUMMARY                                   June 19, 1995
             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 20005-4788.  The complete text of SUGAR AND
SWEETENERS is available 2-3 working days following release of this summary.
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World Sugar Surplus Forecast; U.S. Sugar Production Forecast Lowered;
Quota Shortfall Redistributed
 
World sugar production will be in surplus in 1994/95.  A mid-June revision to
India's production estimate moved the USDA forecast from a production-
consumption balance to a production surplus.  Since March, production forecasts
were revised upward for several key producing countries, such as India,
Thailand, Cuba, and Brazil.  Lower-than-originally expected consumption in
Russia and Mexico helped move sugar supplies from the previous expected deficit
to a surplus.  This surplus follows 2 years during which world stocks were
drawn down sharply.  These stock drawdowns resulted in strong world sugar
prices, particularly during the last quarter of 1994 and the first quarter of
1995.  However, world sugar prices are expected to face downward pressure due
to a forecast larger world sugar crop and increased export availabilities in
1995/96.  World sugar production in 1995/96 is forecast to increase 1.8 percent
to a record 117.7 million metric tons, and is expected to exceed world
consumption.
 
Particularly noteworthy are developments in India, where production was revised
upward 11 percent from the March forecast (1.1 million tons above USDA's May
forecast) to a record 16.0 million tons for 1994/95 and a projected 15.1
million for 1995/96.  Good weather conditions and increased planted area, which
resulted from firm market prices at planting and a hike in the minimum cane
support price, resulted in a record 1994/95 sugarcane crop of 255 million tons. 
In addition, firm prices during 1993/94 enabled mills to pay outstanding
arrears to farmers, which has stimulated cane deliveries in 1994/95.  The
government provided early and late season crushing incentives, which increased
early season crush, and may raise late season crush volumes.  In addition, new
sugar mills, which were licensed during the late 1980's and early 1990's, are
coming on line with improved efficiency and greater capacity.
 
For the first-half of June, world raw sugar spot prices (f.o.b. Caribbean
ports, contract No. 11, New York) averaged 13.79 cents a pound.  In April and
May, world raw sugar spot prices averaged 13.63 and 13.49 cents, respectively. 
Prices averaged 14.63 cents for the January-March quarter, the highest since
the first quarter of 1990.  World refined sugar prices (c.i.f. contract No. 5,
London) showed a similar pattern, with prices averaging 16.31 and 17.05 cents a
pound in April and May, and 18.12 cents in January-March 1995.  Improved crop
prospects for many key cane sugar producing and exporting countries and beet
sugar producers across Europe are placing downward pressure on prices.  The
direction of prices over the next several months will be largely influenced by
weather.  If good harvest conditions continue in the Southern Hemisphere and if
sugarbeet crops across Europe receive normal rains this summer, prices are
likely to continue to weaken.  If adverse conditions develop in a number of key
countries, prices could rebound, especially since global stocks will still be
relatively tight.  Apart from weather, the level of Russian and Chinese buying
and shipments of new crop sugar from South-Central Brazil will shape the
movement of prices of both world raw and refined sugar this summer.  Again
India will be a pivotal country to watch.  Despite the record production,
imports of 400,000 tons are expected this summer, and may be used to establish
buffer stocks.  India's sugar industry is pressing the government to lift the
ban on sugar exports.  A decision has yet to be made, however, India is
expected to become a net sugar exporter during 1995/96.
 
U.S. sugar production in fiscal 1995/96 (October 1995-September 30, 1996) is
projected at 7.68 million short tons, raw value, down 3.8 percent from the
revised 1994/95 estimate.  Lower output forecasts result from a likely return
to normal yields for sugarbeets and for Louisiana sugarcane, plus the closure
of two mills in Hawaii.  Beet sugar production is forecast at 4.35 million
tons, down 200,000 tons from the revised estimate for this year.  Cane sugar
production for fiscal 1995/96 is forecast at 3.33 million tons, down 103,000
tons from the current year.  Florida, the leading producing State, is expected
to produce 1.80 million tons, up 4 percent from the weather-delayed 1994/95
harvest.  Louisiana's sugar production is forecast at 900,000 tons, down 12
percent from the record outturn this year as yields are expected to return to
more normal levels.  Hawaii's sugar industry continues its contraction as two
more sugar factories will close by mid-1996 and production drops 8 percent to
460,000 tons.  Production in Texas and Puerto Rico are expected to remain
relatively unchanged at 130,000 and 40,000 tons, respectively.
 
U.S. sugar consumption for fiscal 1995/96 is forecast at 9.53 million tons, up
1.6 percent or 150,000 tons from the revised estimate for the current year. 
The year-to-year anticipated growth rate is comparable to recent years, but
down from the 2.4-percent annual growth experienced during the second half of
the 1980's.
 
U.S. sugar import forecasts for fiscal 1995/96 are not available as the level
of the tariff rate quota (TRQ) imports has not been set.  The United States has
a commitment, under the Uruguay Round Agreement, to the World Trade
Organization (WTO) to import at least 1.256 million short tons, raw value of
sugar per year at the low tariff level of the TRQ.  Imports under USDA's
reexport programs are forecast at 825,000 tons in 1995/96.  U.S. sugar exports
for the forecast year are projected at 450,000 tons, largely consisting of
refined sugar reexports.  
 
For fiscal 1994/95, total imports are estimated at 1.68 million tons,
consisting of 1.39 million tons of TRQ sugar, 225,000 tons of sugar for the
reexports programs, 49,000 tons from Canada, 1,000 tons high tariff, and 15,000
tons for polyhydric alcohol. The estimate for imports of quota-exempt sugar for
reexport have been reduced 175,000 tons from the March estimate as refiners are
delaying imports because of substantially lower futures market prices in 1996. 
Sugar exports for 1994/95 were lowered 8 percent to 470,000 tons due to the
relatively slow pace of exports during the first-half of the year.
 
On June 13, the Secretary of Agriculture announced that a TRQ shortfall of
101,883 short tons (92,427 metric tons) is expected for the import quota period
that ends September 30, 1995.  The countries for which a shortfall is
officially declared are Barbados, Congo, Gabon, Papua New Guinea, and St. Kitts
and Nevis.  In response, the U.S. Trade Representative announced that the quota
allocations for the five countries have been suspended for the current quota
period, and are being reallocated among the remaining quota holders, except for
the 10 minimum quota-holding countries.  The Secretary of Agriculture also
reconfirmed that the August 8, 1994 announcement setting the TRQ at 1,458,333
short tons (1,322,978 metric tons) remains unchanged, and that the TRQ entry
period ends September 30, 1995.  Current U.S. supply-demand forecasts for sugar
have not been revised to reflect the reallocation of the TRQ shortfall.  
 
U.S. raw sugar prices (nearby futures, c.i.f., duty-paid, contract No. 14, New
York) averaged 22.93 cents a pound in the first half of June (September
contract) compared with 23.10 cents in May; 22.76 cents in April; and 22.22
cents for the first half of fiscal 1995.  Comparable prices for the first 8-1/2
months of fiscal 1994 (October through mid-June) averaged 22.02 cents.  The
upturn in prices has reflected contraction in the fiscal 1995 supply situation
in terms of domestic production, imports of nonquota sugar for reexport, and
stocks.  
 
U.S. corn sweetener production in fiscal 1996 (October/September) is forecast
to total 12.2 million tons, dry basis, up 4.3 percent from the current year. 
This projection reflects expanded industry capacity and is based on recent
growth trends equal to 1990-94 averages, excluding the high and low years. 
HFCS production for fiscal 1996 is forecast at 8.15 million short tons, dry
basis, up 350,000 tons, or 4.5 percent from the current year.  HFCS-55 will
likely account for 60 percent of the total and HFCS-42 the remainder.  Combined
glucose and dextrose production are projected to reach 4.05 million tons, up
150,000 tons from the fiscal 1995 forecast.  The United States remains the
world's leading producer of corn sweeteners, accounting for about three-
quarters of global production.  For 1995/96, about 715 million bushels or 9.1
percent of the U.S. corn crop forecast at 7.9 billion bushels are expected to
be used to produce corn sweeteners by the corn wet milling industry.
 
In the U.S., HFCS-55 and HFCS 42 consistently sell at a discount to wholesale
refined sugar.  The average discount over the last 5 fiscal years has been 4.2
cents a pound for HFCS-55, and 6.4 cents for HFCS-42.  For the first 8 months
of fiscal 1995, the discount has been 6.4 and 8.5 cents, respectively.  For
May, HFCS-55 and 42 list prices averaged 18.5 and 16.2 cents a pound,
respectively.
 
This issue of the Sugar and Sweetener Situation and Outlook also contains a
special article entitled "Mexico:  Sugar and Corn Sweeteners, An Update." 
Printed copies of the report should be available in about 1 week.  For further
information contact Peter Buzzanell (202) 219-0888.  For details on electronic
access, call ERS Customer Service, 202-219-0515.
 
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