NEW YORK, Dec 7 (Reuters) - The United States will need to import 475,000 short tons (ST) of sugar more than the government has projected for the 2023/24 season (Oct-Sept) to have adequate supplies in the domestic market, broker JSG Commodities projected on Thursday.
The U.S. Department of Agriculture (USDA) estimated in November that the country would need to import 3.13 million ST to have enough supplies for local users. Of that, it projected Mexico would send 1.2 million ST.
JSG President Frank Jenkins said in a presentation during the brokerage's annual sugar conference in New York that Mexico will be able to export much less than that, only around 725,000 ST, so higher imports either at full tariff or via extra low-tariff quotas (TRQs) will be needed.
The USDA will release new sugar supply & demand estimates on Friday.
Barbara Fecso, an analyst at USDA's Economic and Policy Analysis Division, said in a following presentation that the government is aware of the problems with Mexico's sugar supplies.
"If Mexico decides that they will reduce their exports to us, we will need to do something," she said, adding that current analysis indicates an eventual need for additional imports of above 500,000 tons.
The government needs do decide, she said, if it will open new low-tariff quotas (TRQs) to producing countries or if it will wait for market imports at full tariff, which would keep sugar prices in the U.S. close to recent all-time highs.
The U.S. imports around a third of the sugar it uses every year. Mexico is its main supplier in a bilateral agreement, but the neighboring country had weather difficulties that cut its production. (Reporting by Marcelo Teixeira; Editing by Sandra Maler)
