October 4, 2001

U.S. and World Sugar Economies Expected to Improve

Both the United States and world sugar economies are predicted to improve over the next 10 years after the current oversupply of sugar is reduced, according to a report from the Center for Agricultural Policy and Trade Studies at North Dakota State University.

Won Koo, center director, says world demand for sugar is expected to grow faster than world supply, resulting in gradually increasing prices. Carribean sugar prices are predicted to increase from 8.51 cents per pound in 2000 to 12.67 cents per pound in 2010. The U.S. wholesale price of sugar is projected to increase from 22.5 cents per pound in 2000 to 26.6 cents per pound in 2010, if the United States maintains its sugar programs, he says.

"The U.S. domestic wholesale price is expected to reach the lowest level in 2001 and recover slowly for the 2000 to 2010 period," Koo says.

Total world sugar trade is projected to increase by 4.6 percent between 2000 and 2010, from 23.8 million metric tons to 24.9 million metric tons.

Canada’s sugar production is predicted to increase 15.6 percent for the period, while Canadian imports are expected to increase 13.5 percent. Mexico’s production is expected to increase 23.7 percent, but exports are projected to increase 44.5 percent for the period due to increased exports to the United States under NAFTA.

Most exporting countries, such as Australia, South Africa and Cuba, are projected to increase production and exports during the forecasting period. Most importing countries, including Algeria, China, Japan and Korea, are predicted to increase imports for the 2000-2010 period.

U.S. and world sugar markets for 2000-2010 were evaluated using the Global Sugar Policy Simulation Model. The analysis is based on assumptions about general economic conditions, agricultural policies, population growth, weather and technological changes.

For a copy of the report, "2001 Outlook of the U.S. and World Sugar Markets," contact Carol Jensen, Department of Agribusiness and Applied Economics, P.O. Box 5636, Fargo, ND 58105, telephone (701) 231-7441, Fax (701) 231-7400, or e-mail cjensen@ndsuext.nodak.edu . It is also available on the World Wide Web at: http://agecon.lib.umn.edu/ndsu.html .

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Source: Won Koo, (701) 231-7448, wkoo@ndsuext.nodak.edu
Editor: Gary Moran, (701) 231-7865, gmoran@ndsuext.nodak.edu