Thursday January 26, 2012

USDA Projects Mexican Sugar Reductions

Washington, DC — Mexican sugar production is expected to fall some 330,000 metric tons during the 2011/2012 growing season, according to the USDA.

The revised forecast is based on lower than expected harvests through January 7, and the domino effect it is estimated to have on the harvest cycle for the remainder of the year, the USDA says.

Overall, U.S. sugar imports are expected to decline by 563,000 short tons raw value, with a bulk of the lowered expectations resulting from the drop off in Mexican production.

However, despite these declines Shawn Hackett, president of Hackett Financial Advisors, Inc., does not foresee an increase in sugar prices.

“We're dealing with very large surpluses,” Hackett tells Candy & Snack TODAY. “Unless there's a very unusual weather scenario, we should be looking at surplus for the next few years.”

He adds that global prices are expected to drop much lower, but the U.S. won’t experience this because its current sugar policy is not a free market system.