| ORLANDO, Fla., Feb 13 (Reuters) - The level of U.S. domestic
sugar production and its impact on local sweetener prices will depend on
the impact of the freeze in Florida, potential beet acreage and what
Washington will do with bumper stocks of sugar in its warehouses, analysts
said Tuesday.
Peter Buzzanell, executive director of Peter Buzzanell and Associates,
Inc., said in a speech at the annual Sweetener Colloquium that acreage in
California may fall to 50,000 acres from 100,000 because of plant closings
in the state.
``They've had a drought (in Florida) that could impact next year's
crop,'' he said. ``The U.S. government also has 800,000 tonnes of sugar
they will have to dispose of.''
He told Reuters stock levels held by the USDA, beet acreage and the
impact of the freeze in Florida last month will weigh on the upcoming
season. Buzzanell's firm specialized in the sweetener industry.
``That is the big question we have to wrestle with now,'' Jerry
Coleman, vice-president of marketing for Monitor Sugar Co. in Bay City,
Mich., said.
USDA sugar stocks stood at 793,000 tonnes while total ending stocks
reached 2.027 million tonnes. U.S. domestic sugar prices are currently
hovering around 20-21 cents a lb, having recovered somewhat from
multi-year lows around 17-18 cents.
The problems faced by the local sweetener industry illustrated by the
decision of Imperial Sugar Co. (AMEX:IHK - news) will likely persist,
given the oversupplied American sugar market. Coleman said ``there will be
further rationalizations, mergers'' as the industry seeks to cope with
price pressure. |