Consumers continue to clamor for foods and drinks sweetened with all-natural sugar. Products such as Heinz and Hunt’s ketchup, Pepsi Throwback, Snapple, Gatorade, and Wheat Thins are just a few of the household names to answer the call. Click here for a current list.

Andy Briscoe, President & CEO, The Sugar Association.

Starbucks, one of the nation’s biggest restaurant chains, summed up its decision to use sugar in its food products: “We heard loud and clear from our customers that they want food, when they purchase food at Starbucks, to be made of high quality ingredients and from simple recipes.”

Of course, those same consumers would probably be fuming if many of these same manufacturers scrapped all-natural sugar and replaced it with artificial or man-made sweeteners, such as neotame, sorbitol, and polydextrose.

A recent Harris Interactive poll found that 52 percent of parents make a conscious effort to avoid artificial sweeteners, yet few are actually able to identify common sweeteners used in food products.

With such overwhelming evidence that consumers want natural products like sugar, you might think a move to artificials would never happen. Think again.

The Dietary Guidelines for Americans are currently being revised, and the federal government is under pressure to recommend limiting Americans’ sugar intake to as little as possible. If this happens, manufacturers would be left with little recourse but to reformulate their recipes.

And if they reformulate, many consumers may not even realize it.

When shown the ingredient label of a popular children’s product, given to dehydrated infants, only four percent of parents could identify all the sweeteners. About one in seven (13 percent) parents couldn’t identify any of the four sweeteners used.

Considering 87 percent of parents say the sweetener used in a product is at least somewhat important to them when making food decisions for their kids, they have a desire and right to know what sweeteners they are feeding their family.

The Sugar Association has petitioned the Food and Drug Administration to follow Canada’s lead and clear up consumer confusion with front-of-package labeling for artificial sweeteners. For nearly five years, this petition has been tangled in government red tape while new sweeteners come on the market each year and some even change their names to be less recognizable.

Andy Briscoe, President and CEO of the Sugar Association said, “We know consumers are confused by the more than 25 sweeteners being used in the U.S. market. Consumers have a right to know what is in their food, and the current FDA labeling standards aren’t working.”

We’re confident that when given all the facts, Americans will make the same choice people have made for more than 2,000 years: sugar.

Pat Henneberry, senior vice president of commodities for Imperial Sugar Company.

Even with a lot of market changes worldwide, the outlook for raw sugar reflects “a relatively tight supply and demand,” says Pat Henneberry, senior vice president of commodities for Imperial Sugar Company.

Based on the USDA’s July report for World Agricultural Supply and Demand Estimates (WASDE), Henneberry says: “We’re viewing the market as relatively firm for the rest of this fiscal year, ending in September.

“And the beginning of the succeeding year should also be firm because quota supplies won’t become readily available until the new crops in Central America that start in November and December.”

WASDE is the monthly report by the Department of Agriculture about the supply and demand of major domestic and foreign crops and U.S. livestock.

To hear more from Henneberry about the July WASDE report, please view this video.

The July 2010 WASDE report from USDA showed an 11.8 % ending stocks/use ratio for 2009-10 and a 9.0 % ending stocks/use ratio form 2010-11. If not for the 270,000 tons of additional imports as per the TRQ increase, the ending stocks/use ratio for 2009-10 would have dropped to 9.3 % from the 10.7 % in the June report.

Looking at 2009-10, the beet crop estimate was reduced by 50,000 tons due to lower than expected output from the old crop in May. The estimate of Florida production was increased by 8,000 tons. On the import front, the USDA added 270,000 tons of TRQ, assuming a 30,000 shortfall on the increase quantity and a 133,000 ton shortfall overall. This was partially offset by an 110,000 ton reduction in the estimate of Mexican imports from 540,000 to 430,000 based on the pace of imports to date (302,277 tons through the end of May). The impressive tail on the Mexican crop and related dip in prices will allow for at least a couple of cargoes of estandar to be shipped, and the new estimate may well prove a bit on the low side when all is said and done. On balance, the total supply was thus increased by 118,000 tons to 12.033 million tons. One or two high tier raws cargoes have already been landed in the US, suggesting that the USDA’s high tier import estimate of 75,000 tons for 2009-10 is too low.

Frank Jenkins of The Jenkins Sugar Group.

Somewhat surprisingly, the demand side of the ledger was left alone. Demand for 2009-10 is thus remains 1.12 % down from 2008-09. The April Sweetener market Data report (displayed below) shows US deliveries for human us and products for re-export up 7.4 %, led by the bottling sector which is up a staggering 29.3 % year-on-year. For 2010-11, the USDA shows US food use declining by a further ½ percent. If each year showed an actual increase of 2.0 % this would amount to nearly 600,000 tons of demand over the 24 months. 2010-11 ending stocks would be 355,000 tons and the ending stocks/use ratio would be 3.2 %.

For 2010-11, the beet crop estimate was increased by 80,000 tons to 4.710 million tons and the Texas cane crop estimate was reduced by 10,000 tons to 140,000 tons. Thus 2010-11 ending stocks are estimated at 952,000 tons, or 9.0 % of use.

The Mexican estimate is beginning to resemble a parlor trick, where no matter which or how many components are changed, the ending stocks figure never changes. In the most recent iteration, production for 2009-10 was increased by 35,000 tons, imports decrease by 135,000 and exports reduced by 100,000 and – voila! – ending stocks are unchanged at 868,000 tons. (Last month production was increased by 185,000 tons, neatly offset by a 15,000 ton reduction in imports and a 170,000 ton increase in domestic consumption, keeping the 868,000 tons ending stock figure intact.) We do not see how Mexico will bridge to the new crop without additional imports. The import number in today’s report assumes a few hundred thousand tonnes of additional imports before the end of September, and the export number is now a bit too low. Thus, it appears that Mexico will have only about six week’s worth of stocks on September 30th, roughly eight to 10 weeks before any meaningful new crop production is available. This will leave Mexico in the unenviable position of trying to import refined sugar ahead of the new crop, alongside Thailand, the Philippines and the Dominican Republic in addition to the usual suspects such as Pakistan, Bangladesh and Iraq.

We believe that the two quota increases seen recently have put the market on a better footing, but it is clear that the market is still extremely tight. Two simple measure of this are that the 2010-11 beginning stocks are estimated to be 231,000 tons lower than the 2009-10 carry-in – a stock situation that provided for all of the angst, gnashing of teeth and historically unprecedented pricing seen in the past six months. Secondly, in our update following the May WASDE report, we posed the question “If an 11.6 % stocks/use ratio in the April WASDE justified a 200,000 ton quota increase, does an 11.6 % stocks/use ratio in May call for another 200,000 tonne increase?” It turned out that the 10.7 % ratio in the June report called for a 300,000 ton increase, so the math is pretty consistent. So – what does the 11.8 % ratio in today’s report indicate? We doubt we will hear from the USDA again this year, aside from perhaps an early 2010-11 TRQ announcement, and feel the market will be perilously tight as a result – even if the dubious use estimate in today’s report proves accurate.

It is easy to get used to looking at the current S&D and be lulled into a false sense of security. Surely 11.8 % is more accommodating than 10.7 %. Should the 11.8 % ending stocks/use ratio prove accurate, it would be unprecedented. The average ending stocks/use ratio for the past decade is 16.89 %. The difference is roughly 550,000 tons of inventory.

Despite the very welcomed and skillfully allocated quota increases, we still see the market as undersupplied through October and believe that additional high tier imports will be needed in August and/or September to make ends meet. The stage is set to ensure that the 2010-11 futures positions will hold to a 27.00 to 30.00 range and that refined prices will hold in the upper 30 cent range, if not the recently announce 43.00 rate.

Read The Jenkins Sugar Group online.

Frank Jenkins, Jenkins Sugar Group

The following sugar market analysis is used by permission of Frank Jenkins of The Jenkins Sugar Group:

The USDA will formally announce a 300,000 short ton (272,155 metric tonne) increase in the 2009-10 Tariff Rate Quota tomorrow. The Increase is for raw sugar only and is for the period from when the Certificates of Quota Eligibility are allocated through September 30, 2010. Traders in London seemed to like the announcement, as prices on the LIFFE whites contract improved by $11.20 to finish the day at $572.00 after peaking earlier at $574.70. This would indicate an October price in excess of 17.00 when trading opens on the ICE futures and a new 10-week high. To the extent that the USDA„s announcement is responsible for the excitement in London, it is knock-on effect and boosted sentiment on additional evidence that the nearby market remains extremely tight, with the US joining Thailand, the DR and the Philippines as extraordinary importers. The announcement all but precludes the US being an importer of whites this summer, at least under a refined sugar TRQ. As the USDA announcement came immediately following the July #11 expiry, any stress will be confined to the spot cash market once the US Trade Rep allocated the CQE‟s in the next few days (hopefully).

In word market fundamentals, Unica reported that the center-south has produced 8.95 million tonnes of sugar through June 16, a 31 % increase over last season. In the first half of June 2.3 million tonnes of sugar were produced – also 31 % up on last year. Impressively, the 31 % increase comes from 173.7 million tonnes of cane – a 20 % increase over last year.

India‟s Farm Ministry stated that it plans on imposing an import tax on while sugar in the new crop year, but will wait until more is known about the size and state of the 2010-11 crop before setting a level. While India‟s monsoon is achieving better coverage, the rains were 13 % below normal in the June 1-July 5 period. Rains are expected to spread to Uttar Pradesh in the next two to three days.

In a late-game upset, Singapore’s Wilmar International, the world‟s largest listed palm oil trader, agreed to buy CSR‟s sugar arm, Sucrogen, which had been expected to go to Chin‟s Bright Food Group.

In the NAFTA region: The following is our projection of the S&D for this year and next, adding the TRQ increase adjusted for a further 21,000 ton shortfall. The all-but-ample ending stocks/use ratio for 2009-10 of 13.27 % suggests to us that the July WASDE report, due out Thursday, will include a further upward revision in domestic food use number, tipping the scales back towards the “marginally sufficiently supplied” zone. We may be cynical, but the timing “preview” will leave the USDA looking at least somewhat proactive instead of having to react to a screwed-down stocks/use ratio should the use number indeed be increased again.

The S&D currently shows no high tier raw sugar imports and in no way reflects the difficulty traders will have in sourcing raw sugar in the current environment. We believe that there will be an outsized TRQ shortfall and that high tier imports, mainly for the badly congested center-south of Brazil, will at the end of the day be the source that ultimately keeps the US raws market in supply. The issue is it seems that the center-south is already overstressed by its role as the sole entity responsible for bridging from the past few year‟s deficit markets to the anticipated surplus.

Read more at Jenkins Sugar Group.

Frank Jenkins of the Jenkins Sugar Group

The USDA has released its June updated supply and demand (S&D) estimate for the US and Mexican sugar markets, fine-tuning several components of the S&D that served to reduce ending stocks for both 2009-10 and 2010-11 by 80,000 short tons. This resulted in a reduction in the 2009-10 ending stocks/use ratio from 11.6 % to 10.7 % and a reduction in the 2010-11 ending stocks/use ratio from 7.9 % to 7.2 %.

Supply for 2009-10 was increase by 50,000 tons on higher imports under the re-export program. Imports under the program are now estimated at 400,000 tons. Total supply is estimated at 11.915 million tons. Total demand was increased by 130,000 tons: the estimate of exports was increased by 50,000 tons, transfers to sugar containing product license holders for export were increased by 25,000 tons and the estimate of domestic food use was increased by 55,000 tons.

The domestic food use estimate has now been increased by 215,000 tons in the past two months, but still reflects a 1.14 % decline from 2008-09. The estimate of 2010-11 food use of 10.300 million tons reflects a further 0.5 % decline from 20009-10. These year-on-year declines in off take are difficult to square with the empirical evidence (switching from HFCS to sugar, population growth of 0.9 %), or with the USDA‟s own Sweetener Market Data set (SMD), which shows total sugar deliveries for human use and products re-export from October through April up 7.4 % over FY’09 at 5.456 million tons. Sugar use for the beverage sector alone is up 29.3 % over FY’09 according to the SMD.

The estimate of 2009-10 imports of high-tier sugars was left unchanged at 75,000 tons. This number is likely too low by at least half. Vessel fixtures indicate that high-tier raw sugar imports will begin hitting US shores in June and will be commonplace during July. This is the clearest symptom of the USDA’s starving the market for supply and the best evidence that the TRQ is insufficient to meet raw sugar demand. As of last night’s settlement, the tariff was greater than the FOB cost of world sugar. The 75,000 tons of high tier sugars estimated in today’s report, which we believe represent refined imports, will generate $24,315,000 of revenue to the US Treasury.

Aside from the 80,000 ton reduction to the 2010-11 carry-in, no other changes were made to the 2010-11 estimate. The carry-out is estimated at 764,000 tons, or 7.2 % of use. This equates to less than four week’s consumption.

Looking at Mexico, the USDA sensibly increased Mexican 2009-10 production by 185,000 metric tonnes to 5.085 million tonnes raw value, or 4.752 million tonnes “as made,” though this figure will prove to be a tad light. The import estimate for Mexico was reduced by 15,000 tonnes and the consumption estimate increased by 170,000 tonnes and – voila – the ending stocks figure is unchanged at 868,000 tonnes. The USDA still has Mexico importing a massive 955,000 tonnes in 2009-10. While there is some slippage in our data, we believe Mexico has imported roughly 350,000 tonnes this fiscal year. Thus, based on today’s report, Mexico will have to import a further 600,000 tonnes between now and September 30th to achieve the 868,000 tonne carry-out estimated in today’s report – roughly two months worth of consumption 10 weeks before the new crop.

The prospects for 2010-11 are extremely interesting. Assuming the US eventually imports 200,000 tons of high-tier sugar, the carry-in for 2010-11 would be 1.275 million tons – 224,000 tons less that the carry-in for 2009-10 and 385,000 tons less than the 2008-09 carry-in. While the domestic cane crop is expected to be 188,000 tons larger in 2010-11 than in the current year, we see no reason to believe that Mexico will be a better exporter in the October ’10 – March ‘11 than in the current year.

If there is no additional increase to the 2009-10 TRQ between now and September, we can expect the first half of 2010-11 to be every bit as challenging from a buyer’s perspective as was 2009-10. To bring the 2009-10 sending stocks/use ratio up to the 2008-09 level would require 200,000 tons of high tier imports and a further TRQ increase of 221,000 tons. Assuming that this is accomplished (and we doubt the USDA will give the increase – particularly if high-tier imports are flowing) 2010-11 imports will have to be increased by 389,000 tons to achieve the same ending stocks/use ratio seen at the end of 2008-09. Thus to return the market to a more “normal” disposition, between now and September 2011 we will need 735,000 tons of imports (high-tier, Mexican and/or TRQ, in order of likelihood) in addition to the imports estimated in today’s report.

Visit Jenkins Sugar Group online.

Simon Keighley has become a familiar face around the large Imperial Sugar refinery complex at Port Wentworth, Ga., teaching new approaches to problem solving. His style is more like that of a coach working with a team.

He likes to say that he helps people learn how to solve problems they thought were unsolvable.

Keighley is a business advisor with Hagen and Company focuses on the little things that happen in a manufacturing plant and identifies hidden problems that no one may have known about. Then, he works with teams to find appropriate solutions that not only improve efficiency but directly and favorably improve profitability.

The process used has the acronym, DMIAC, a proven project methodology that has five phases:

Define the problem.
Measure key aspects of the current process and collect relevant data.
Analyze the data to investigate and verify cause-and-effect relationships.
Improve the current process based on data analysis.
Control the future process to ensure that any deviations from target are corrected.

Hagen and Company helps companies increase performance and cut costs by eliminating manufacturing and processing problems. Clients include Coca-Cola, BP, Kimberly-Clark, Alcoa, BHP and BASF, in addition to Imperial Sugar.

Simon Keighley, a business advisor withHagen and Company, on the floor at Imperial Sugar's Port Wentwoth plant.

The process begins by ranking problems by value to the business, the actual dollar value. Then, drilling down on what’s most important to profitability of the business that needs to be fixed first.

For example, how to reduce or eliminate shutdowns of a mechanized packaging facility or assembly line or finding ways to eliminate even the slightest waste in food packaging.

Keighley believes that quality can always be improved, and he works together with teams to deliver the “next level of quality,” as he calls it, and to make the results sustainable and embedded into the work culture of the organization.

Simon Keighley;, of Hagen & Company, works with Imperial associates to significantly increase productivity or throughput in the sugar making process by using the DMAIC methodology.

Over the last few months, a special team of workers at Imperial Sugar’s refinery at Port Wentworth, Ga., have significantly increased productivity or throughput in the sugar making process by using a proven and well-known project methodology in manufacturing that has the acronym, DMAIC.

The DMAIC methodology improved throughput in the centrifuges.

The team – made up of Imperial Sugar operators, electricians and mechanics – has examined bottlenecks in the sugar making process and what challenges are created when refinery production is increased. For example, they’ve found ways to reduce breakdowns of the large machinery used to refine sugar.

Their overarching objectives have been to boost the color, consistency and quality of sugar the company produces. And, in the process, they have found meaningful efficiencies to increase profitability.

The initiative has been under the tutelage of a seasoned business advisor with Hagen & Company, Simon Keighley.

Hagen and Company’s approach is to focus on the little things that happen in a manufacturing plant and identifies hidden problems that no one may have known about. Then, work with teams to find appropriate solutions that not only improve efficiency but directly and favorably improve profitability.

DMAIC means:

Define the problem.
Measure key aspects of the current process and collect relevant data.
Analyze the data to investigate and verify cause-and-effect relationships.
Improve the current process based on data analysis.
Control the future process to ensure that any deviations from target are corrected.

Based on the success of the initial DMAIC group – known as the melt rate improvement team – Imperial Sugar is aggressively forming more teams that will focus on lowering operating costs and increasing yield in sugar refining, processing and packaging.

In this short video, Keighley explains the achievements of the melt rate improvement team.

The USDA has released the monthly update of its supply and demand report for the US sugar market. The report showed an 11.6 % stocks/use ratio for 2009-10 – unchanged from the April estimate despite the 200,000 short ton quota increase announced on April 23rd. This begs a question: if an 11.6 % estimated stocks to use ratio in the April WASDE justified a 200,000 ton quota increase, does an 11.6 % stocks/use ratio in May call for another 200,000 increase? Not likely, but there is a certain logic to the question.

Looking at 2009-10, estimated cane production was reduced by 60,000 tons – the Louisiana estimate was reduced by 35,000 tons to 1.465 million tons, Texas by 24,000 tons and Hawaii by 1,000 tons. Imports under the TRQ were increased by 167,000 tons, indicating that 33,000 tons of the newly announced quota increase will not be shipped. This brings the total shortfall estimate for 2009-10 to 103,000 tons despite the USDA’s best efforts at reallocating the shortfall to capable shippers. The estimate of high-tier imports was increased by 65,000 tons to 75,000 tons. Total supply was thus increased by 172,000 tons to 11.865 million tons.

Mexican exports to the US are still estimated at 540,000 tons. As exports in the Oct-March period totaled only 225,398 tons, Mexico’s import program has underperformed and is on hiatus. Storage and financing pressures will only ease as the crop winds down, we see no reason to think exports will total more than 400,000 tons.

The estimate of domestic food use was increased by 160,000 tons to 10.300 million tons. Taking the 160,000 ton increase in food use into account, today’s report still shows a 1.65 % drop in domestic food use. Should the half-year trend in the SMD hold for the full year, the difference would be 487,190 ton increase in food use and a 487,190 reduction in ending stocks.

Frank Jenkins

Today’s release provides the first estimate of 2010-11 S&D. The estimate of beet production is 4.630 million tonnes. With the remarkable planting campaign experienced in Michigan, Minnesota and North Dakota and the full saturation of GM seed, this seems conservative. Cane production is estimated at 3.535 million tons, with Florida up 155,000 tons at 1.785 million tons and Texas up 34,000 tons at 150,000 tons. TRQ imports are pegged at the default WTO minimum and imports of Mexican sugar are estimated at 550,000 tons. Total supply is estimated at 11.479 million tons.

The demand side of the 2010-11 ledger is unchanged from 2009-10 – neither logical nor surprising. Ending stocks are estimated at 844,000 tons and the ending stocks/use ratio is 7.9 %. Overlaying our assumptions for 2009-10, beginning stocks would be 487,190 tons lower and use would be 243,595 tons higher. Ending stocks would thus be estimated at 113,215 tons, or 1.1 % of use. To get the ending stocks for 2010-11 back to 11.6 % using the USDA numbers would take a quota increase of 389,000 tons. Using our estimates, it would take an increase of 1.150 million tons to get back to an 11.6 % ending stocks/use ratio.

Jenkins Sugar Group online.

Frank Jenkins of the Jenkins Sugar Group

However, according to US Customs data, over the past 20 years total US imports have been skewed 45 % in the October-March period and 55 % in April-September, as the domestic crop dominates demand in the first half of the fiscal year. If this trend holds true, the last two full months of the quota year will be import-starved in the absence of a further increase in the TRQ. Looked at another way, using the 704,051 TRQ import in the first half of the year as a basis, the market should be looking for roughly 860,000 tonnes in the second half. Assuming the USDA’s 70,000 tonne shortfall estimate and including today’s increase, total TRQ availability for the second-half of the year is about 524,000 tonnes. In addition, and significant contraction in the differential between the #11 and #16 markets will allow traders who have hedged high tier imports in the #16 to unwind their trades, removing somewhere between 25,000 and 75,000 tonnes of supply, depending on who you listen to.

While we believe today’s increase is a fraction (30 %??) of what is needed to properly supply the raw market between now and October 1st, it is inevitable that buyers will flee the #16 market while trying to buy quota offshore as cheaply as possible. A significant pullback is likely for the #16 in the near term before the August-September situation manifests itself in higher prices and widening differentials against the #11. While July/September should move to a discount, traders would be unwise to bury precious TRQ into the June-July period at discounts beyond the cost of carry while leaving themselves short the August-September period, hoping for more help from the USDA. If today’s increase proved anything, it’s that the folks in the USDA will spoon-feed the market, with prevention of outright shortages the goal as opposed to “reasonable stocks”, though, admittedly, some would argue the two are the same.

Read Frank Jenkins Sugar Reports.

The past six months have provided a once-in-a-generation experience for the world’s sugar markets, and the US market has been no exception. Since the beginning of the program year on October 1st, the #11 sugar market has rallied from a low of 20.00 to 30.40 and subsequently plummeted to a low of 15.46 on April 1st, buffeted by a unique mix of supply and demand dynamics, speculative fund in- and out-flows, currency fluctuations, occasional rogue exports and, to some extent, by the reluctance of the US to allow additional imports despite a raw sugar price more than 15.00 above world raws and US refined prices $590 (nearly 27.00 cents) over the London whites market.

While the bull market in world sugar undoubtedly impacted US prices, the US market has been remarkable resilient since the #11 futures peaked two months ago. While the #11 market has recoiled by more than 14.50 cents per pound, the July #16 is 8.00 beneath its 39.00 contract high. US refined prices are down 4.00 cents since the world market peaked basis the Midwest list price. World whites are 12.55 cents off their late-January highs. The point is that the US market, love it or hate it, is to a very large extent the product of the USDA’s management of the program. Thus the tea leaves provided by today’s USDA supply and demand report merit close inspection.

The bottom line of today’s report is an 11.6 % stocks/use ratio for 2009-10, up from 10.3 % in the March report and only marginally below the 11.6 % 2008-09 ending stocks/use ratio from the April 2009 WASDE report released one year ago today. Nothing about 11.6 % stocks/use suggests an imminent quota increase. Based on today’s report, we do not see an increase likely before the May WASDE report.

In today’s report, beginning stocks for 2009-10 were increased by 48,000 tons, due to revisions to the 2008-09 analysis, as opposed to additional early-harvest (September) beet production. The estimate of Florida production was reduced by 35,000 tons to 1.630 million tons. Due to the recent 90,329 short ton (81,946 metric tonne) TRQ reallocation and the expectation that a higher percentage of the TRQ will be filled due to the lower #11 value, the TRQ shortfall was reduced from 200,000 tons to 70,000 tons. There were no changes made to the “D” side of the S&D, thus ending stocks were increased by a net 143,000 tons.

About the US food use estimate: The USDA has been open about the fact that there are apparent discrepancies in data regarding refined imports and deliveries for human use by “non-reporters”. In the Sweetener Market Data report published yesterday, the USDA’s Farm Services Agency notes “ FSA is still not satisfied with our procedures to estimate refined imports and domestic deliveries by non-reporters…The current procedure results in negative refined sugar imports and domestic deliveries by non-reporters, which is, of course, not possible.” The department cautions that year-on-year comparisons are likely misleading.

Frank Jenkins, The Jenkins Sugar Group.

The USDA’s data through February 2010 shows FY 2010 deliveries for domestic human consumption at 4.372 million tonnes – 216,775 tons, or 5.3 %, higher than deliveries in the same period last year. Refined imports under the TRQ have totaled 59,185 tonnes through February, and Mexican refined imports have totaled 199,820 tonnes for a total of 259,000 tons. As deliveries through February were up by 216,775 tons, even if 83 % of all refined sugar imports were double-counted, domestic food use would still be flat year-on-year, as opposed to down 3.17 % as per today’s report.

Looking at two extremes, if consumption is flat year-on-year, the use figure in today’s WASDE in underestimated (and ending stocks overestimated) by 333,000 tons. If the 5.3 % increase shown in the USDA Sweetener Market Data through February is accurate and holds up through the year, use would be under estimated by 909,000 tons.

Mexican exports to the US in 2009-10 are estimated at 540,000 short tons. Based on the pace of exports to date, the crop progress and the fact that storage and finance pressures are less of a factor in the second-half of the year, we feel this estimate if too high by 100,000 tons.

What does this mean: The 11.6 % ending stocks/use ratio for 2009-10 in today’s report gives little impetus for the USDA to increase the TRQ today, or this month. The USDA’s threshold for increasing imports is not price-based, but rather based on a physical shortage of sugar. Today’s report should assuage any concerns that there will be a shortage of sugar in the coming months. This is a dangerous illusion.

TRQ arrivals through April 5th totaled 716,350 tonnes, leaving a 393,585 tonne unshipped balance. Adjusting for the 70,000 short ton shortfall in today’s report, the actual balance is 330,081. Argentina recently tendered its quota (49,010 tonnes) for delivery in the July-September quarter, and numerous other shippers are committed to delivering sugar in July-September. Many of the TRQ holders have un-shippable balances following the reallocation (Australia has 7,077 tonnes). A more realistic TRQ availability for April-June is 240,000 tonnes. At the pace of TRQ arrivals from October 1st through March 30th, this supply will be fully depleted in 61 days, or on June 10th. The assumed balance left for the July-September quarter will last only two to three weeks of the 13-week quarter.

From mid-June through September 30, there are roughly 90,000 tons of TRQ available and roughly 200,000 tons of re-export sugar. In simple terms, this is sufficient to the demand from one large cane refinery – Baltimore, C&H or Savannah, when its running up to speed. Thus, assuming that the two Gulf refineries run on Louisiana and Texas sugars, two large refineries, Yonkers and AmCane will have to compete for the residual supply from Hawaii and Florida and any (unlikely) Mexican cargoes. Raw sugar imports must be increased by a minimum of 500,000 tons to accommodate this need – either as high tier, TRQ or form Mexico.

The below tables depict the USDA numbers from today with our estimate as per the above. Table 1 compares the USDA S&D with our own. Table 2 uses our S&D as per Table 1, and then solves for 10.5 % ending stocks over use and for 13.9 % stocks/use – the same ratio as 2008-09, which set us on the path we are now on. These two scenarios show a need for total additional imports of between 580,000 and 955,000 tons. Once again, these imports will either come in the form of TRQ imports, high tier imports or imports from Mexico. If today’s report allows the USDA to remain on the fence, which appears to be where they are most comfortable, US domestic raws will have to rally to high tier parity, and high tier refined imports will likely flow until domestic refined prices decline sufficiently to close that spigot.

Used by permission – Frank Jenkins, Jenkins Sugar Group.

Frank Jenkins of the Jenkins Sugar Group

While Mexico has been busy of late importing 250,000 tonnes of sugar from world origins, the US buyers have had to be more innovative in drawing fresh supply into the market, writes sugar analyst Frank Jenkins of Jenkins Sugar Group.

As the USDA – which determines how much imported sugar will be allowed into the US each year – has kept supplies inordinately tight, the price of both refined and raw sugar has soared to massive premiums to the world sugar market. This has allowed traders to import world sugar outside the Tariff Rate Quota and pay a normally preemptive duty to the US government – an event not seen in the life of the modern US sugar program, dating back to the early 1980’s.

The High Tier duty for raw sugar is 15.35 cents per pound, allowing traders to land sugar in the US at roughly 34.00 cents per pound duty paid based on world raw sugar priced at 17.00 cents per pound. More interestingly, the duty for refined sugar is 16.21 cents per pound, refined sugar valued at 22.00 on the London exchange, can be landed in the US duty paid for about 40 cents per pound. This compares with US refined list prices ranging from 49.00 to 55.00 cents per pound.

While the imported refined is not in appropriate packing and is often not of the quality to compete directly with US made refined product, the fact that these imports are occurring is another indication that the US sugar market is is evolving, and the USDA’s management of the program is a major catalyst.

Jenkins Sugar Group.

While the Dominican Republic will likely get 14,000 tonnes, the timing of the crop cycle is the issue there – there are still 152,365 tonnes of unshipped original quota from the DR. Any smaller quota holder will receive a top-off quantity – Guatemala will likely receive less than 4,000 tonnes.

Australia – the fourth largest quota holder – will likely get about 6,500 tonnes of new quota, but since they have already shipped their original quota of 87,402 tonnes, they will left with a virtually un-shippable quantity unless there is a further meaningful increase. Thus the all-important question: is today’s announcement lunch, or a mere snack before a real TRQ increase in April (or May)? If this is lunch, any shorts in the market – and there will be many – will be on the dinner menu.

Jenkins Sugar Group.

Desserts made with mascarpone cream belong in this class. Nearly everyone likes the sophisticated flavor of mascarpone cheese, making it a perfect choice to use for large groups of people.

Mascarpone cream is that harmonizes excellently with an incredible amount of other flavors, making it possible to make one batch and turn it into a variety of desserts. The home baking enthusiast can make desserts in a glass by filling verrines (glasses) with mascarpone cream and finish some with one type of coulis and fruit and some with a complete different flavor profile.

For this berry tart I use a hazelnut crust whose buttery flavor pairs nicely with the mascarpone cheese. For some desserts I like to add liquors or certain essence to the mascarpone cream to highlight other components in the dessert. However, for this tart, I made the cream aux naturel. The ganache however is complimented with a little cassis or black current liqueur.

Chef Eddy Van Damme

Getting it all together!

The hazelnut tart dough can be made weeks in advance if frozen. Defrost the dough overnight in a refrigerator and bake as required. The dough makes double of what you need for one tart, divide the dough in half and prepare one tart ring. Roll the remaining dough about 3 credit cards thick and cut in circles. When baked fill with ganache, lemon curd, crystallized chocolate. The mascarpone cream can be made a week in advance as well and kept in the freezer. Fill one mousse ring with a dimension smaller than the tart ring with the mascarpone cream, about one third full. Fill the rest of the cream in small silicone domes for a decorative element on the surface of the tart. Remove both from the freezer once the tart shell is baked and cooled.

For the red effect, spray the tart with red tinted cocoa butter or use a sieve filled with dehydrated raspberry powder.

Hazelnut tart dough:

Yield: Hazelnut tart dough for 2- 8 inch (20 cm) tarts

2 sticks (8 oz) Unsalted butter , soft 240 g

1 Cup (4 oz) Imperial Powdered sugar 120 g

1 (1) Large egg 1

1/2 teaspoon (1/2 tsp) Salt 2.5 g

1 teaspoon (1 tsp) Vanilla extract 2.5 ml

1 Cup (4 oz) Hazelnut flour 120 g

2 Cups (9 oz) All purpose –pastry flour 270 g

1. In a bowl mix the butter until creamy and smooth. Add the powdered sugar and combine well. Scrape the bowl and add the egg, salt and vanilla extract. Mix until thoroughly combined.
2. Mix in the hazelnut flour. Add all the flour at once and mix until just combined. Do not over-mix.
3. Chill the dough until firm. About 30 minutes in the freezer or chill overnight in the refrigerator.
4. Roll the dough on a floured surface about 3 credit cards thick.
5. Line the tart ring. Prick the dough with a fork and place in a 375°F (180°C) oven. After a few minutes check the tart, if bubbles develop prick the dough. Bake until golden brown. About 15 minutes and let cool.

Ganache with cassis liquor:

1/4cup (2 oz) Heavy cream 60 g

1 Tbsp (1/2 oz) Invert Imperial sugar 15 g

3 oz (3 oz) 52-54% chocolate, chopped 90 g

1 Tbsp (.5 oz) Cassis liquor 15 g

1. In a saucepan bring the heavy cream and invert sugar to a boil.
2. Place the chocolate in a bowl and add the boiled cream in 5 increments. Stir with a spatula. Add the liquor.

Mascarpone cream:

2 (2) Gelatin leaves 2

3/4 Cup (6 oz) Whipping cream (34-36 %fat) 180 g

4 (4) Large egg yolks 4

1/4 Cup (2 oz) Water 60 g

6 Tablespoons (3 oz) Extra fine Imperial granulated sugar 90 g

8 oz (8 oz) Mascarpone cheese 240 g

1. Place the gelatin leaves in very cold water and set aside.
2. In a cold bowl whisk the whipping cream to very soft ribbon consistency. Absolutely do not whip to a peak! Set aside.
3. Fill a saucepan with a small amount of water and bring to a boil and then turn to a low simmer. In a bowl whisk together the egg yolks and measured water. Add the sugar and whisk well. Place the bowl over the simmering water and whisk constantly until the yolk mixture reaches at least 165°F (74°C). Remove from heat.
4. Remove the gelatin leaves from the water and squeeze well to remove excess water. Whisk the gelatin into the yolk mixture. Add the mascarpone cheese and vanilla extract and whisk smooth.
5. Add the soft whipped heavy cream and gently fold into the above using a spatula. Fill into an oiled and sugared ring mold immediately, about one third to half full. Use the remaining cream for small silicone domes.

Learn more from Chef Eddy Van Damme. Click here.

Andy Briscoe, President & CEO of the Sugar Association at an industry meeting.

After years of getting a bad rap, sugar usage – and demand – are on the rebound.

World sugar prices are the highest they’ve been since 1982 – around 30 cents a pound as of this writing. The current price partly reflects decreased production from some of the world’s largest sugar producing countries because of weather problems or poor crop conditions. But there’s something else afoot that could keep demand strong in the months ahead.

Consumers increasingly are on the lookout for natural sweeteners, and major food and beverage manufacturers are responding with a return to sugar-based products.

Andy Briscoe, President & CEO of the Sugar Association, shared his thoughts on the resurgence of sugar in a recent interview with ISC Newsroom.com:

What are some of the key factors behind the uptick in sugar usage?

Eighty percent or more of all foods and beverages are purchased because of taste. So the primary driver in my mind is people like and demand the quality taste of sugar. Sugar is also a natural sweetener and has been safely used for more than 2,000 years.

Why the increased interest in sugar now?

Today, more than ever, consumers want to know what they are eating and what they are feeding their families. Sugar is a time-tested and safe sweetener – a natural ingredient shoppers can pronounce. And we know consumers prefer natural ingredients.

For the same reason, I think there’s a growing negative perception around the use of chemical artificial sweeteners. Today, the U.S. has 27 sweeteners and many of them are man-made, chemical sweeteners.

The Sugar Association recently conducted a Harris Interactive poll of 1200 parents in the U.S. and found half of the parents did not want their children consuming artificially sweetened products. We also found most parents could not identify the sweeteners that are in their children’s foods.

While sugar consumption has been targeted as a scapegoat for childhood obesity, an Institute of Medicine study of carbohydrates in 2002 reported the data available on dental caries, behavior, cancer and risk of obesity shows there is insufficient evidence to set an upper level for total or added sugars. The same lack of evidence was re-confirmed in a European Food Safety Authority scientific review in March 2009.

How did the introduction of high fructose corn syrup affect the demand for sugar?

Around 1980, high fructose corn syrup was rapidly replacing sugar in U.S. soft drinks and beverages. As a result, the sugar industry lost about 2.5 million tons in annual deliveries to beverages during the next six years. It’s taken us from 1986, when deliveries hit bottom, to climb back up to about 10.5 million tons in total U.S. deliveries in 2008 and 2009 (see attached WASDE chart and Total U.S. Sugar Deliveries 1980-2008 chart).

While overall demand for sugar is back up, the actual per capita consumption of sugar has gone down about 40 percent since 1970. That is partly due to population increase, but also because of other caloric sweeteners coming into the marketplace, such as high fructose corn syrup, glucose syrup, dextrose, etc. This reduction in sugar consumption has occurred at the same time the obesity rate has tripled (see attached chart). So this definitely shows sugar has not been the cause of obesity as some have inferred.

In what ways is sugar making a comeback today?

Several food and beverage manufacturers are switching from the use of high fructose corn syrup to sugar – Snapple, Gatorade, Pepsi Throwback, Heritage Dr Pepper. Most recently, Heinz announced a move back to sugar with their Simply Heinz product. Consumer preference, taste, and sugar being all natural are the key drivers for these switches.

There’s also a major trend among manufacturers to simplify product ingredients – to have five or less ingredients helps reduce confusion for consumers. The idea is to get back to contents people can recognize and feel comfortable feeding their children. Consumers should not have to have a chemistry degree to be able to read the ingredients on some of today’s labels. Sugar, however, is a natural ingredient people quickly recognize and trust.

What does the future hold for the sugar industry?

We’re already into 2010 and everything still looks strong for current usage trends.

Usually, in the sugar industry, when demand exceeds production, the farmers rise to the occasion either by planting more or doing what they can to increase the yield of their crops. This cycle takes about 18 months or so, which gets us through one growing season. This last year, for example, U.S. beet and cane growers increased production by roughly five percent on average. If demand continues to be strong, growers will continue their efforts to increase acreage and production as best they can.

So whether it’s 2011, 2012 or longer when production catches up to demand, I don’t know. Today, I don’t have any sense of sugar demand tracking down, at least for the near term.

As an industry, I’d like to think we’re in a better position demand-wise than we’ve been in the last 25 or 30 years. We’ve cycled back to where we were in 1980. I would assume most sugar growers and processors are pleased. The Sugar Association will continue to work hard for the industry – to promote sugar as part of a balanced diet and healthy lifestyle.

(More information about sugar and the Sugar Association can be found at www.sugar.org.)