August 21, 2003

 

World Demand for Sugar Expected to Grow

The U.S. and world sugar economies are predicted to improve over the next 10 years after the current over-supply is reduced, according to two agricultural economists at North Dakota State University.

World demand for sugar is expected to grow faster than world supply, resulting in an increase in the U.S. wholesale price of sugar from 21.76 cents per pound in 2002 to 25.28 cents per pound in 2012, according to Won Koo, a professor of agricultural economics at NDSU and director of the Center for Agricultural Policy and Trade studies and Richard Taylor, an NDSU research associate.

"World sugar prices, referred to as the Caribbean price of sugar, will increase more than U.S. prices," Koo says. "The lower price increase is due mainly to substantial increases in U.S. sugar imports from Mexico under the North American Free Trade Agreement."

Under NAFTA, Mexico is expected to be one of the largest suppliers of sugar to the United States. Its exports to the Unites States will be unlimited beginning in 2009 when implementation of NAFTA is completed. "Also, if Mexico replaces the sugar that is used in soft drinks with high fructose corn syrup, the excess sugar will likely be exported into the United States under the NAFTA agreement," Koo says.

Other findings in the study:

• Canada’s imports are predicted to increase 12.8 percent from 1.2 million metric tons to 1.3 million metric tons in 2012.
• China is expected to increase its imports about 56.1 percent from 1 million metric tons for the 2000-2002 average to 1.5 million metric tons in 2012.
• The former Soviet Union’s imports are predicted to increase slightly to 7.5 million metric tons.
• Cuba’s exports are predicted to increase 14.8 percent from 3 million metric tons for the 2000-2002 average to 3.4 million metric tons in 2012. The projections are based on the assumption that the political situation remains the same between the United States and Cuba.
• Australia’s exports are predicted to increase 24.6 percent from 3.4 million metric tons to 4.3 million metric tons in 2012.
• The European Union’s exports will increase 6.7 percent from 4.9 million metric tons to 5.2 million metric tons in 2012. Sugar production in the EU is predicted to increase slightly while consumption is predicted to decline from 17.4 million metric tons to 16.1 million in 2012.
• Brazil’s exports are predicted to decrease slightly from the 2000-2002 average because exports were substantially higher than usual in 2002. Production will increase 6.7 percent from 18.4 million metric tons to 19.6 million metric tons in 2012.

Other countries that will increase imports include Japan, South Korea, Algeria, Egypt and Indonesia.

India is expected to decrease imports from 0.6 million metric tons in 2000-2002 to 0.3 million metric tons in 2012.

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Source: Won Koo, (701) 231-7448, wkoo@ndsuext.nodak.edu
Richard Tayor, (701) 231-7990, staylor@ndsuext.nodak.edu
Editor: Rich Mattern, (701) 231-6136, richard.mattern@ndsu.nodak.edu