Food Business News - September 27, 2011 - 24

Market Insight

Sweetener prices
at a

Tight supplies, good demand seen supporting prices
weetener markets are possibly at their most critical time of the year, with old crop beet sugar and imported cane sugar supplies running low, new crop beet sugar barely available and negotiations for 2012 corn sweetener contracts just beginning, all at elevated pricing levels from a year ago and amid labor issues at the nation’s largest beet processor and general economic uncertainty. At the same time, confectioners and bakers, part of the Coalition for Sugar Reform, descended on Washington in mid-September to call for an end to the current U.S. sugar program they contend is responsible for tight sugar supplies and high prices and to promote new sugar policy for inclusion in the 2012 farm bill. The 2011-12 marketing year for sugar begins Oct. 1, 2011,

major beet processor and cane reﬁner offering prices at 62c a lb f.o.b. for spot through Dec. 31, 2011, although last week major sugar reﬁners dropped offering prices for Jan. 1, 2012, to Sept. 30, 2012, to 59c a lb. Nearby prices are up as much as 15% from a year ago when prices declined about 10c a lb, or 15%, in mid-September as new crop beet sugar came to market earlier than usual. In contrast, this year’s beet crop is later than average and much later than a year ago. Aggregate sugar beet harvest in the four major states of Minnesota, North Dakota, Idaho and Michigan was 3% completed as of Sept. 18, compared with 10% in 2010 and 6% as the 2006-10 average, the U.S. Department of Agriculture said in its latest Crop Progress report.

swing later in October. A few processors had some sugar available from the 2010 beet crop, but it was at a price buyers resisted and often at locations requiring additional freight costs to reach buyers. Increasingly, it appeared buyers were encountering more difﬁculty ﬁnding nearby supply. Plus, at least two of the largest beet processors were said to have prospective 2011-12 production highly sold and were effectively out of the market until new crop supply is assured. At the same time, shipments of sugar from Mexico that

raw value, dropped 36% from July and fell below the same month last year for the ﬁrst time in 2010-11, according to Census Bureau data used by the U.S.D.A. Shipments of sugar and corn sweeteners, mainly high-fructose corn syrup, may cross the border in unrestricted volume and duty free under the North American Free Trade Agreement.

Corn sweetener prices may rise
While trade in sugar remains relatively slow until new crop U.S. beet and Mexican cane supplies become available in

Labor woes complicate beet outlook
Complicating the late beet crop in the Red River Valley was a lockout at all American Crystal Sugar Co. facilities that began Aug. 1 after union members rejected a new ﬁveyear contract offer at the end of July. Beet factories were running at minimal volume from the early harvest with replacement workers. Some in the trade expressed concern about those workers’ success once production is in full

rsterk@sosland.com

RON STERK

reached record levels even before the end of the marketing year declined sharply the past three months as that nation’s 2010-11 supply runs low before the 2011-12 cane harvest begins. Preliminary shipments in August of 80,030 tonnes,

the next few weeks, the corn sweetener market is just heating up with a signiﬁcant price increase from 2011 contracted levels appearing more likely. The initial indication of 2012 corn sweetener offering prices were up 15% to 30% from

FOODBUSINESS NEWS

September 27, 2011

Food Business News - September 27, 2011

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