U.S. Sugar Demand Falls as Production Hits Record High by Amit Gupta, Kedia Advisory
The U.S. sugar demand is projected to decline for the third consecutive year, with 2024/25 consumption estimated at 12.48 million short tons (ST), a 2.7% drop from the previous year. The decline is attributed to changing consumer habits and the growing use of GLP-1 drugs for weight management. Despite the lower demand, sugar production is expected to reach a record 9.37 million ST, ensuring ample supply in the market. The sugar stocks-to-use ratio is projected at 15.3%, exceeding the USDA’s adequate level of 13.5%. With higher domestic output, sugar imports are expected to fall to 2.89 million ST from 3.81 million ST in the previous season.
Key Highlights
# U.S. sugar demand is expected to fall by 2.7% in 2024/25.
# Consumption declines for the third straight year amid changing dietary trends.
# Sugar production forecasted at a record 9.37 million ST this season.
# Higher domestic output leads to reduced sugar imports.
# The sugar stocks-to-use ratio rises to 15.3%, ensuring ample supply.
The U.S. sugar market is witnessing a shift as demand declines for the third consecutive year. In the 2024/25 season, sugar consumption is expected to drop by 75,000 short tons (ST) from last month’s projection, reaching 12.48 million ST—2.7% lower than the previous season. This sustained decline in demand is influencing sugar prices, creating a surplus in the market and limiting price gains.
One of the key reasons behind the declining sugar demand is the increasing adoption of GLP-1 weight-loss drugs, which have significantly altered consumer sugar intake patterns. Additionally, the USDA reported that sugar deliveries to consumers have been lower than initially expected, further confirming the trend of reduced demand. However, despite a slight downward revision, U.S. sugar production is still forecasted to hit a record 9.37 million ST, increasing overall market availability. This higher output has kept prices in check, preventing any sharp spikes.
The combination of lower demand and record-high production is leading to improved sugar availability in the domestic market. The sugar stocks-to-use ratio is now projected at 15.3%, well above the USDA’s benchmark of 13.5% for adequate supply levels. Additionally, due to higher domestic output, sugar imports are expected to fall sharply to 2.89 million ST in 2024/25, down from 3.81 million ST in the previous season. These factors indicate a well-supplied market, limiting the chances of any significant price rallies in the near term.
Finally
With declining demand and record production, the U.S. sugar market remains well supplied. Higher domestic output and reduced imports will likely keep prices stable despite changing consumption trends.
